Index of Saral State Rooftop Solar Attractive Plan

Executive summary

With the renewable energy market becoming increasingly relevant to the Indian power and utilities sector, the renewable energy segment as a whole (and rooftop solar as a sub-segment) is witnessing substantial interests from entrepreneurs, developers, potential investors, end users and government entities. Government of India (GoI) is striving to support the rapid scale up of renewable products through several initiatives such as policy advocacy, financial assistance schemes and regulatory interventions. At the same time, various states have also adopted state-level guidelines with the aim of creating a conducive ecosystem for rooftop solar installation. Based on states’ stakeholders’ readiness, availability of natural resources and state governments’ approach towards rooftop solar, the proliferation has been non-uniform across the states, creating an avenue for experience sharing and knowledge exchange for the states. At this stage of the sector, it is, therefore, imperative for the states to exchange knowledge and learn from each other in the journey to achieve the country’s ambitious target of 40 GW rooftop solar installations by 2022.

With this background, the idea of introducing a platform for knowledge-sharing and inducing healthy competition in rooftop solar segment among Indian states was envisioned. This platform could depict the most attractive states, best practices, postive developments, while highlighting the key improvement areas across policy development and implementation, consumer involvement, and investment ecosystem.

Thus, the Ministry of New and Renewable Energy (MNRE) and its partners decided to introduce a measuring scale or an index to evaluate and rank all states according to their performance, growth, level of maturity, policy framework, and implementation environment in the rooftop solar sector. The development of State Rooftop Solar Attractiveness Index – SARAL – will empower state government entities as well as investors with evidence to make informed decisions.

To comprehensively and realistically assess the performance of rooftop solar sector in all states, five broad buckets have been identified after extensive stakeholder consultation. These buckets are:

• Comprehensiveness/robustness of policy framework

• Ease of implementation/effectiveness of policy support

• Investment climate for the rooftop solar sector

• Consumer experience

• Business ecosystem

The team identified multiple parameters and sub-parameters to quantify those five buckets, for which data points have been captured through primary and secondary researches and subsequently mapped to a numeric scale. Finally, each score has been scaled based on the assigned weightages and an aggregate score has been computed. Based on the states’ scores, grades have been assigned on the following scales: A++, A+, A, B++, B+ and B. The exercise has been completed with the help of extensive stakeholder support from almost all the states and guidance from experts in the sector.

Aim

The aim of SARAL index is to evaluate Indian states based on their preparedeness to support rooftop solar deployment. The index aims to objectively assess states based on several parameters critical for establishing strong solar rooftop markets. These parameters belong to five broad categories:

• Robustness of policy framework

• Effectiveness of policy support/implementation environment

• Consumer experience

• Investment climate for rooftop solar sector

• Business ecosystem

Utility and benefits of SARAL index

The index serves as an important tool to:

• Benchmark development and deployment of solar rooftop in states.

• Identify states that require more hand holding in terms of policy and investment push.

• Identify investment opportunities.

• Recognize the states that need financing support for development of solar rooftop.

• Gradually, establish a knowledge sharing platform where the progressive states can share their experiences with the other states.

The index can accrue multiple benefits to stakeholders such as:

Central and state governments can use SARAL to

• Initiate dialogues with potential investors.

• Attract investment from domestic and foreign players as well as from development banks.

• Facilitate collaborations with states looking to develop their solar rooftop capacities.

• Compare and benchmark performance of states in regulatory and ease off setting up roof top projects.

• Identify areas of improvement, as well as their counterparts with whom they can engage in knowledge sharing.

Institutional investors can use SARAL to

• Identify states that need credit.

• Measure the impact of financial assistance in terms of loans for the growth of rooftop solar.

Businesses can use SARAL to

• Identify states which can yield better returns on investment in solar rooftop.

• Provide input to their capital budgeting process.

The SARAL Framework