NEW DELHI:
In a monumental stride towards sustainability and financial relief, Delhiites are poised to witness a significant transformation concerning their electricity. With the unwavering dedication and tireless efforts of CM Shri Arvind Kejriwal, the Delhi Solar Policy 2023 has come to fruition. Following the government’s issuance of the policy notification, the doors have swung open for Delhiites to adorn their rooftops with solar panels, paving the way for zero electricity bills. Not only does this herald a newfound era of energy independence, but it also promises an avenue for additional income generation. Under the policy, even those who consume more than 400 units of electricity with solar panels installed will have zero bills, while commercial and industrial consumers’ electricity bills will be halved.
As the national capital embraces this renewable revolution, prudent investment in solar panel installation is projected to yield returns within the span of four years. This landmark development, announced by CM Shri Arvind Kejriwal on January 29, 2024, underscores a triumph for sustainable progress and economic empowerment in Delhi. Notably, the government had sent its file to LG for approval. After waiting for about a month, approval was received from LG, and now this policy has been implemented.
Upon the issuance of the policy notification, Delhi’s Power Minister Atishi stated that the Delhi Solar Policy is a remarkable initiative. Not only will the implementation of this policy benefit Delhiites, but it will also contribute to reducing pollution. Under this policy, the Delhi government will provide monetary incentives to consumers installing rooftop solar panels for every unit of electricity generated. This not only ensures zero electricity bills for consumers but also enables them to earn money from rooftop solar power plants.
“Our aim is to have 50% of Delhi’s total electricity usage sourced from solar energy by 2027. The Delhi government will also make provision for power generation assessment. For this, the government will collaborate with certain institutions. These institutions will assess the capacity of power generation across Delhi using satellite technology. This will relieve consumers from the burden of estimating the potential power generation capacity on their rooftops. Camps will be set up in different parts of Delhi to facilitate this process, ensuring that people do not have to approach the government but rather, the government reaches out to them,” Power Minister Atishi mentioned.
1500 megawatts of solar power available in Delhi under the Solar Policy 2016
Before the Delhi Solar Policy 2023, the Delhi government had issued the Delhi Solar Policy 2016, considered the most progressive policy in the country. In a way, the Solar Policy 2016 laid a strong foundation for solar power in Delhi. Under this, Delhiites have installed solar panels with a capacity of 250 megawatts on their rooftops so far. Under the Solar Policy 2016, DISCOMs have procured 1250 megawatts of solar power from outside. Thus, under the Solar Policy 2016, Delhi has installed nearly 1500 megawatts of solar power.
Help in reducing air pollution with the Solar Policy
The Kejriwal government is working on several initiatives to reduce air pollution. This includes the Delhi Solar Policy. The government believes that the Solar Policy will also help in reducing air pollution. The government has also formulated an EV policy to reduce air pollution, which is the country’s most progressive EV policy, and today Delhi is called the EV capital of India. In December 2023, about 20% of vehicles purchased in Delhi were electric vehicles, the highest in the country.
Zero bill even on electricity consumption of more than 400 units
The Delhi Solar Policy 2023 has several special features. For instance, under this, those who install solar panels on their rooftop will have their electricity bill reduced to zero. The Delhi government already provides 200 units of free electricity to every household. Their bill comes to zero. Similarly, for electricity usage between 201 to 400 units, half the bill is charged, and for usage over 400 units, the full bill is charged. Under this policy, even those consuming more than 400 units of electricity will have their bill reduced to zero if they install solar panels. After the implementation of the Delhi Solar Policy 2023, the electricity bill of all residential sectors in Delhi could be reduced to zero. Whether you use 800, 1000, or 2000 units of electricity, the bill will be zero.
Delhiites electricity bill will be zero and they’ll earn extra
Under the policy, the money spent on solar panels will be recovered within the next four years because the government has provided several subsidies. For example, if a consumer in the residential sector is using 360 units of electricity, they fall into the slab of 201 to 401 units and their electricity bill is half. If that consumer installs a 2-kilowatt rooftop solar panel, they will have to spend ₹90,000 for installation. After that, the consumer’s electricity bill will start coming to zero, saving them ₹1370 every month. Additionally, the Delhi government will provide a monthly generation-based incentive of ₹700. This will result in an additional income of ₹700 per month for the consumer. Combining both, the consumer will save around ₹2000 every month. This way, they will save ₹24,000 per year, and the investment of ₹90,000 will be recovered within 4 years. Solar panels last for at least 25 years. Therefore, after installing solar panels, electricity will be free for 25 years.
Government will provide incentives for five years
The Delhi government will provide 5 types of financial benefits under the solar policy. If you install a 3-kilowatt capacity solar panel, the Delhi government will deposit ₹3 per unit of electricity generated into your bank account. If you install solar panels with a capacity of 3 to 10 kilowatts, money will be deposited at the rate of ₹2 per unit. The Delhi government will continue to provide this generation-based incentive for 5 years. Only the Delhi government in the entire country is providing Generation-Based Incentives (GBI) to those installing solar panels. No other state government besides Delhi is providing this incentive.
Solar power capacity will triple in three years
After the implementation of this policy, within the next three years (by 2027), Delhi will have a capacity of 4500 megawatts of solar power. Of this, 750 megawatts capacity solar panels will be installed on rooftops, while 3750 megawatts will be purchased from outside by DISCOMs. Currently, there is a capacity of 1500 megawatts of solar power in Delhi, which will be increased threefold to 4500 megawatts in the next three years.
Complete information will be available on the portal
A solar portal is being created to make all the information about the Delhi Solar Policy available in one place. All the relevant information related to the policy will be provided. If a government building has a rooftop area of 500 square meters, it is mandatory for them to install solar panels. Within three years of the implementation of the policy, solar panels will have to be installed on the rooftops of all government buildings. The Delhi government will also try to procure solar power from outside Delhi because solar power is becoming cheaper now.
GOALS OF DELHI SOLAR POLICY 2023:
i). Delhi Solar Policy 2023 has two main goals:
Reduce Delhi’s air pollution and fight climate change by establishing Delhi as a leading state for solar adoption across India.
ii). Help fight inflation by bringing the electricity bills of non-subsidized residential consumers to ZERO and for commercial/industrial consumers to 50% of their current bill.
iii). The target of Delhi Solar Policy is to increase the total installed solar capacity of Delhi to 4,500 MW by March 2027 i.e. by 3 times of the current capacity of 1500 MW in only 3 years. This includes 750 MW of rooftop solar plants installations in Delhi and the 3750 MW through utility scale solar plants installed outside Delhi by 2027.
iv). As a result, around 20% of Delhi’s electricity consumption will come from solar power by 2027 – one of the highest in India.
v). Delhi government will spend Rs 570 Crores towards the implementation of Delhi Solar Policy 2023.
KEY FEATURES OF DELHI SOLAR POLICY 2023:
Delhi Solar Policy 2023 is the most-consumer friendly solar policy in India. It provides the following 5 financial incentives to all residential consumers:
Generation Based Incentives (GBI): For every unit of solar power generated, Delhi govt will offer a GBI of Rs 3 for small rooftop plants (upto 3 kW) and Rs 2 for larger plants (3 to 10kW). Delhi is the only government in India that offers GBI and that too for 5 years from the date of installation. Many hurdles in receiving GBI have been removed under the new policy:
There is no conditionality of minimum generation to receive GBI which existed in the 2016 policy.
Amount under GBI will be adjusted against the monthly electricity bill of the consumer. Any excess amount will be deposited into the consumer’s bank account by the DISCOM every month. Earlier, GBI amount was transferred only twice a year.
Capital subsidy: For the first time, Delhi government will provide a capital subsidy to residential consumers of Rs. 2,000 per kW of installation up to a maximum of Rs 10,000 per consumer. This will be over and above the capital subsidy of the Central government.
Net Metering: Under ‘Net Metering’, the solar power generated gets offset with the electricity consumed from the grid. So let’s say if a household has consumed 400 units and generated 100 units of solar power, it will be billed only for 300 units. This allows consumers to benefit from reduced electricity bills.
Roll-over of excess energy units: After net metering, which happens every month, the excess solar units left will be rolled-over into subsequent billing cycles for up to 12 months (until close of every financial year).
Additional income: At the end of the year, in case the solar power generated is more than the consumer’s annual electricity demand, the consumer will earn money for the same from your DISCOM.
Currently, around 70% of Delhi’s residential consumers get ZERO electricity bill (less than 200 units consumption/month). By installing a rooftop plant under the new Policy, partially-subsidized and unsubsidized consumers too can get ZERO bill every month from the first month itself. In addition, they will get a monthly income of Rs 700-900 through Delhi’s govt’s Generation Based Incentive (GBI) and a total return of investment (ROI) in 4 years.
For example:
i). Let’s say a residential consumer’s average monthly consumption is 360 units – so he/she is a partially subsidized consumer.
ii). The consumer installs a 2kW rooftop solar plant at approx. cost of Rs 90,000 with taxes and subsidy included.
iii). The consumer will start getting ZERO electricity bill right away (savings of ~ Rs 1370 per month) as well as a GBI benefit of approx. Rs 700 per month. Total annual savings will be Rs 24,000.
iv). Since the consumer spent Rs 90,000 initially, return on investment is 4 years. But the consumer will continue enjoying the ZERO bill for the life of the solar plant ~ 25 years.
Apart from residential consumers, Delhi government has decided to extend GBI for commercial/industrial consumers too for the first time (for the first 200 MW of installations in Delhi). They will receive an incentive of Rs 1/unit of solar power generated for 5 years in addition to the benefits of net metering, roll over of excess units and additional income described above. As a result, an average commercial or industrial consumer in Delhi can save nearly 50% on their existing electricity bill and obtain a return of investment (ROI) on rooftop plants in 4 years.
Group Housing Societies and Residential Welfare Associations will continue to receive a GBI of Rs 2 per unit of solar power as was the case in the 2016 solar policy.
Features like Group Net Metering, Virtual Net Metering and RESCO model will continue under the new Delhi Solar Policy as well.
Note: Under RESCO model, a large customer (typically with >25kW demand) doesn’t have to invest in a solar plant but enters into a power purchase agreement (PPA) with the solar developer (RESCO – Renewable Energy Service Company) to purchase electricity at a set tariff for a fixed period of time.
Under the Delhi Solar Policy 2023, some new innovative deployment models will be introduced to address challenges faced by consumers who wish to install solar plants but have constraint of funds or rooftop space that they own:
1). Community solar:
For the first time in the country, ‘Community solar’ model will be set in place. It will enable consumers who do not have a suitable roof for installing a solar plant to be part of a community owned solar system installed at a third-party location and get all its benefits like GBI, net-metering etc.
2). Hybrid RESCO model:
This model will allow even smaller consumers (not covered by the traditional RESCO model) who do not have funds but have viable roof space to benefit from cheap solar energy. A Tripartite Agreement will be entered into between RESCO developer, Discom and Consumer. The Discom will collect payment from the Consumer and pass it on to the Developer. The Consumer will benefit from cheap solar power along with net-metering benefits.
3). Peer to peer trading:
For the first time in the country, a model for peer to peer trading of solar energy will also be set in place. It will enable owners of solar energy systems to sell their excess generated electricity in real time to other consumers in Delhi via a P2P energy trading platform.
State Solar Portal:
The new Solar policy aims to create a unified single window state portal. It will act as a one-stop-shop for all information under Delhi Solar Policy, benefits of solar PV systems, installation process related guidelines, list of technically qualified vendors etc.
Government buildings mandate:
Under the new Solar policy, all existing government buildings with a rooftop area more than 500 sq.m. will have to mandatorily install solar plants within the next 3 years.
Out-of-state Solar plants:
Apart from rooftop solar plants, Delhi government will also aggressively increase the procurement of solar power from utility scale solar plants outside Delhi. Delhi is among the first states in India to participate in tendering for RE-RTC (Renewable Energy – Round the Clock) power – an innovative model that combines solar, wind and battery to provide round the clock power at very low prices. So far, 1250 MW is already at tendering stage.
An Apex Committee will be constituted under the leadership of the Minister of Power, GNCTD which shall monitor the progress on policy implementation on a quarterly basis or as often as necessary. It shall include the Vice Chairperson, Dialogue and Development Commission of Delhi, GNCTD; Additional Chief Secretary/Secretary (Power), GNCTD; Principal Secretary (Finance), GNCTD; Special Secretary (Power), GNCTD; CEOs of State discoms and up to four industry experts.
A dedicated ‘Delhi Solar Cell’ shall be constituted within the Power Department, GNCTD, to facilitate, coordinate, and monitor day to day implementation of the Delhi Solar Policy 2023.
The policy was developed after extensive stakeholder consultations over the last 1.5 years with the industry, consumers, government entities, financing institutions, and clean energy think tanks. The consultations and drafting of the Delhi Solar Policy 2023 were led by the Dialogue and Development Commission of Delhi (DDCD) with the support of the Power Department, GNCTD.
