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Introducing massive subsidy in Rooftop Solar: Himachal Pradesh

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With the announcement of the new subsidy scheme for specific states Sikkim, Uttarakhand, Himachal Pradesh, J&K, Lakshadweep and Andaman & Nicobar Islands, there is reason to look at real numbers for the viability of rooftop solar.

Subsidy quantum available: a whopping 70%

Let’s get a clear idea of the difference this has made in the purchase of a rooftop solar power system. The following two graphs look at cash flows with 15% subsidy (earlier) and 70% subsidy (now). The assumption of tariff we have made is INR 4.2/unit (highest slab in the residential segment). Finally, the size of the system that has been assumed is of 5 kW.

Earlier subsidy:

without subsidy

Cash flows with 15% subsidy

 

Highlights:

Quantum of subsidy: 15%

Breakeven years: 12

Cumulative cash flows in 25 years: 6.35 Lakhs

Current subsidy:

with subsidy

Cash flows with 70% subsidy

 

Highlights:

Quantum of subsidy: 70%

Breakeven years: Reduced to one-third to only 4 years

Cumulative cash flows in 25 years: 9.8 Lakhs

Typically, a breakeven of 4 years can be expected only by industrial or commercial customers. It’s understandable how the proposition was economically unviable for the residential segment earlier and now residential customers are expected to jump at the subsidy while it’s available.

Other Parameters

Let’s now look at the other parameters that play a role in the success of rooftop solar in Himachal Pradesh. For the most part of the year, Himachal Pradesh receives an irradiation more than the cut off required to support Solar PV (4.5 kWh/m²/day), an average of 5.99 kWh/m²/day (Summer months), 5.89 kWh/m²/day (in the wet monsoon months) (refer). With seasonal tracking, the efficiency in winters can be improved. So, Himachal looks like a decent place to install rooftop solar.

Himachal Pradesh also has net-metering regulations in place allowing you to connect your solar power system to the grid (refer). This serves as virtual storage avoiding the hassle of getting batteries and wastage (added cost).

So, all in all, the introduction of 70% subsidy has made Rooftop Solar a viable option for a residential customer. Now, it remains to be seen whether the subsidy amount will be disbursed on time. This will also determine the uptake of rooftop solar in Himachal Pradesh. The early off takers have a safer bet, so if you are desirous of subsidy, now is the time to go solar. Find out how much you should install by using our Solar Calculator and send us a request by clicking on I’m Interested.

Tanya Batra

Tanya keeps a close track of policy updates in the field of Rooftop Solar in India and likes to write blogs on its application for the end customer

14 thoughts on “Introducing massive subsidy in Rooftop Solar: Himachal Pradesh

  1. Helo Tanya,
    This looks very lucrative. Do the regulatory controls interfere, if a Solar Installation company rents hundreds of roofs and install JV- 5KW or 10 KW units, in either partnership with the house owner, or lease the set up from single house owner to run and make profit on this venture. The investor, obviously cannot own the project, because he/she does not own the roof and if the house owner decides to sell the home, there could a problem.
    Would you (I mean India Gov.) allow me to do the business in India, I am Canadian Citizen, as well as Pakistani ?
    Syed

  2. Seems Govt. is following back steps, although it’s a attractive way to promote solar PV in those regions.

    I would like to know if there is any Govt. support for Concentrated PV fabrication or Installation in India ?

    Regards,
    Jatin

  3. Dear Tanya

    Well written note. Thanks for sharing.

    You know if they have funds to disburse? And how long it takes for subsidy amount to come in?

    1. I am not aware of any inside information. We have not previously dealt with subsidy, however typically, it should take about 4-5 months to be disbursed.

  4. Hi Tanya,
    I am from Himachal and would certainly like to avail this opportunity. Who should I contact.
    A) Can you refer me to a specific web site?
    B) Also I am a farmer and am keen on installing solar powered water pumps for irrigation. Will this subsidy (70%) apply to solar pumps too?

    1. Hi Anil,

      Thank you for your question. Typically, how the subsidy works is that the system in installed first at full cost and then government releases subsidy after project execution. You should get in touch with an installer in Himachal for this. Please e-mail me on tanya@sunkalp.com and I may be able to put you in touch with one.

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  6. We are a group of volunteers and opening a new scheme in our community. Your site provided us with valuable information to work on. You’ve done an impressive job and our entire community will be grateful to you.

  7. Renewable energy sources like solar power are abundant and generally unlimited in availability and offer a greater potential for a cleaner future for planet Earth. Along with the many cost saving and environmental benefits, the Government of India extends subsidies that are available to anyone interested in installing solar energy systems for home or office use.

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