SMEs in India are hesitant to install rooftop solar panels: Deloitte survey

In India several power-consuming small and medium enterprises (SMEs) hesitate to install rooftop solar panels due to perceived performance risks says a survey carried out by Deloitte in collaboration with the CIF.

The survey, titled ‘Scaling Up Rooftop Solar in SME Sector in India’, was conducted by across 150 MSMEs in six industrial clusters — rubber and plastic, pharmaceuticals, automobiles, paper, food and beverage, and textile.

The finding assumes significance as India has set a target of having 40 gigawatt (GW) of rooftop solar capacity by 2022.

The installed rooftop solar capacity in India remained at 1.44 GW7 , as of December 2018. Thus, interventions at multiple levels would be required to achieve a target of 40 GW in the long term (by 2022).

Under the OPEX model, PPAs drive the Indian rooftop solar market with large C&I entities. Achieving the 40 GW target will require bringing segments such as MSME and residential consumers to the forefront.

While the MNRE has continued to support residential consumers through capital subsidy, the MSME sector has to compete with large C&I entities characterised by larger scales of operation and superior credit profiles.

With a limited bandwidth of existing rooftop solar players (due to financing and operational constraints), largescale adoption of rooftop solar by the MSME segment is likely to take much longer time under the business-asusual scenario noted the research firm. Based on the market survey and stakeholder consultations, the study proposed that the following interventions should be considered to help overcome key barriers impeding the proliferation of rooftop solar in the MSME segment, said the firm in its report.

“The survey was conducted on the basis of average electricity consumption, concentration and composition of MSMEs, scale and volume of operations, profitability and geographical spread.

“The level of awareness about rooftop solar was quite low among the sample surveyed, many high-power consuming SMEs were hesitant to install rooftop solar because of the perceived performance risks,” the survey said.

Abhishek Bhaskar, energy specialist at the US-based Climate Investment Funds (CIF), which has contributed to the survey, said limited access to finance, need to strengthen awareness, and escalating energy expenses are impacting the long-term profitability, competitiveness and sustainability of the sector.

“A multi-pronged approach involving supportive regulations, risk-bearing financing, and awareness building is needed to demonstrate viability and help scale up rooftop solar in the sector,” he added.

With PTI Inputs


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