In March 2019, India's Central Ministry of New and Renewable Energy (MNRE) launched the second phase of its grid connected solar rooftop program to generate a cumulative capacity of 40GW from the scheme by 2022.
MNRE provides 20-40% financial assistance to residential consumers. It offers 40% central finance assistance (CFA) for capacity of 3kWp and 30% CFA for capacity beyond 3kWp and up to 10kWp.
Group housing societies (GHS) and residential welfare associations (RWAs) receive 20% CFA for generating up to 500kWp (limited to 10kWp per house). State power distribution companies, known as DISCOMs, execute the scheme in states.
The CFA was meant to act as a sweetener for households to opt for solar rooftop panels that can, depending on size, cost between Rs 1 lakh and Rs 2 lakh.
In January 2020, the ministry approved a proposal to install 25 MW of roof top solar (RTS) capacity across Maharashtra by the Maharashtra State Electricity Distribution Co Ltd (MSEDCL) or Maharashtra DISCOM.
In August 2020, MSEDCL invited tenders for empanelment agencies to install RTS systems in residential premises aggregating 25MW. The empanelment agencies were required to offer five years of warranty and maintenance support for five years.
Between September 2020 and November 2021, only 8MW had been installed at the residences of 201 beneficiaries across the state.
For once, factors beyond the pandemic are being blamed for the shortfall. A range of irrational conditions placed by the implementing agency are being cited.
“The operational guidelines are impractical, irrational, and arbitrary,” claimed Jayesh Akole, former chairman of the Maharashtra Solar Manufacturers Association (MASMA).
That's why the majority of solar manufacturers could not participate in the tender process and could not get the contract, he added.
What are the impractical conditions?
For one thing, a remote monitoring system (RMS) needs to be provided along with rooftop solar (RTS), according to the guidelines. RMS should contain a bidirectional grid interface meter to monitor import energy, export energy, net energy, solar generation energy, voltage, current, billing parameters, percentage of device connectivity, percentage of data availability.
MSEDCL officials from their office should be able to check the performance of any RTS installed anywhere through RMS.
“RMS with these features is not developed in India or abroad. It is not available anywhere. We wanted MSEDCL to remove the conditions or give us sufficient time during which we can develop such RMS. As per MNRE guidelines, MSEDCL has to provide the RMS and not empaneled agency or consumer. Because MSEDCL wants to monitor it and we don’t have any use for it,” said Saket Suri, a solar manufacturer.
Bidders are required to insure the whole RTS for the five years. “Consumers own the RTS once we install and sell. Like consumers buy insurance of a vehicle and not its manufacturer. Why should we pay for insurance when we agree to provide customer service and guarantee for five years,” asked Suri.
The performance ratio of the RTS should be more than 75% throughout the 5-year warranty period, failing which bidders stand to lose their bank guarantee.
A variety of factors can cause a lower than 75% performance ratio. Dust, shadow on the solar panel due to new building nearby or growth in the height of a tree overlooking the rooftop solar panel, and unstable grid supply can cause fluctuation in performance ratio.
“This condition is oppressive,” says Suri.
Bidders are asked to provide an inverter of a particular manufacturing date/batch to consumers within three months. Bidders say it takes more than 3-4 months for inverters to be imported. And they can see the manufacturing date on inverters only after opening the boxes.
A beneficiary applies online for the installation of an RTS on the MSEDCL website and selects an empaneling agency, which has to approve or reject the proposal by the consumer within three days.
“Agencies have to visit premise where RTS to be installed to see whether it's feasible or not. If the distance of a premise is over 200 km from an office of an agency, it takes 2-3 days to visit it. It is impossible to share approval or rejection within three days. Many beneficiaries ask us to visit on weekends when they have holidays,” another solar agency owner said on the condition of anonymity.
Empaneled agencies have many complaints. Because of the poor response, MSEDCL could finalize only 26 bidders as empaneled agencies for the whole state, which has 36 districts and more than 300 sub-stations. These 26 chosen bidders are not having a good time either.
“I receive 10-15 calls a day just for inquiry by consumers as they feel that they get 40% financial assistance. Earlier there used to be 600-700 empaneled agencies. You understand our woes,” asked one of the empaneled vendors.
- 1 kW Rs 46,820
- 1 kW to 2 kW Rs 42,470
- Above 2 kW to 3 kW Rs 41,380
- Above 3 kW to 10 kW Rs 40,290
- Above 10 kW to 100 kW including at group housing societies and resident welfare associations Rs 37,020
“MSEDCL publishes advertisements with above rates in newspapers asking beneficiaries to apply for RTS. We have to provide a complete RTS including installation, wires, and connections at the above rates. Consumers have to use RTS only,” says another empaneled vendor, who requested anonymity.
“It was slightly possible before Covid19 hit us. Now rates of all materials have almost doubled. We have to use locally manufactured products like inverters and meters instead of branded ones. Such systems can function for 5-7 years unlike the ones with branded products that run for 20-25 years,” says this vendor.
“The Bharatiya Janata Party-led government in India credits itself for promoting direct to bank (DTB) transfers for all the schemes. In this scheme, beneficiaries of RTS pay us above mentioned amount minus 40%. And the central government pays the CFA to empaneled agencies and not to beneficiaries. Here also we have to invest our own money and keep waiting when the government will transfer the money,” said Akole.
Other manufacturers allege fraud in the whole process. “MSEDCL relaxed a few conditions verbally after it finalized 26 vendors. However, the irrational conditions are still the same on paper. MSEDCL could do it during the process of inviting tender. Hundreds of solar agencies could not participate in the process,” said Akole.
Angry manufacturers filed a writ petition challenging the legality and validity of the tender by MSEDCL at the Nagpur bench of the Bombay High Court in 2020. The case is being heard. Over 200 manufacturers staged a protest in Prakashgad, the headquarters of MSEDCL, in Mumbai on November 19, 2021. They have given their demands to MSEDCL officials.
Anil Kamble, chief public relation officer of MSEDCL, said response to the scheme had been poor for lack of “human resources caused by the COVID-19 pandemic.”
“Meanwhile costs of RTS components went up, Central government increased GST from 5% to 12% on RTS. Currently, 1,028 consumers have applied for 35MW RTS installation. And we have already installed 8MW for 201 beneficiaries. We are also in process to add more 47 empaneled agencies for convenience of consumers,” said Kamble, who did not reply to queries about irrational conditions placed in the tender and the writ petition filed by solar manufacturers.
The DISCOM should have determined whether all RTS components were available in the market before issuing the tender, said Neeraj Kuldeep, program lead at the Council on Energy, Environment and Water (CEEW).
“It could reissue new tenders. This is a case of inefficiency on part of the DISCOM. And agencies could not install RTS at the quoted rates as the costs of all equipment have gone up by 40%,” he said.
This story was produced with support from Internews' Earth Journalism Network. It was originally published on 12 December 2021 in Money Control and has been lightly edited for length and clarity.
Banner image: Currently, a beneficiary applies online for rooftop solar panel installation (RTS) on the MSEDCL website and selects an empaneling agency, which has to approve or reject the proposal by the consumer within three days / Credit: Ajinkya Machale.