Indian Government Unveils Rooftop Solar Incentives in Interim Budget

The Indian government has introduced a slew of incentives for in its Interim Budget 2024-2025, aiming to provide ten million households with the opportunity to receive free electricity each month.

In her proposal, Indian Finance Minister Nirmala Sitharaman outlined the plan, offering ten households in India a monthly allocation of 300 kilowatt-hours (kWh) of free electricity under the rooftop solar initiative. Beneficiaries stand to save up to INR 18,000 (US$216.7) through the complimentary electricity and by selling any surplus power back to distribution companies.

Alongside the rooftop solar initiative, the Indian government has earmarked INR 8,500 crores (US$1.1 billion) for the country's grid sector in the fiscal year 2024-2025, a notable increase from the INR 4,970 crores (US$663.5 million) allocated in the previous fiscal year.

In a commitment to advancing renewable energy, the Indian government has bolstered its allocation to the Ministry of New and Renewable Energy (MNRE) by 25.7% for the upcoming financial year.

The announcement also includes measures to support the achievement of India's renewable power targets, encompassing viability gap for 1 gigawatt (GW) of offshore wind capacity and backing the manufacturing and development for electric vehicles (EVs). Sitharaman highlighted that these measures align with India's commitment to achieving net-zero emissions by 2070.

According to a study by the Indian policy institute CEEW, the residential rooftop solar potential in India could reach 32 GW with subsidies from the MNRE. The study, titled ‘Mapping India's Residential Rooftop Solar Potential,' indicates an economic potential of approximately 118 GW in residential rooftop solar under the condition of tailoring the solar size to meet households' electricity demand.

However, considering consumer willingness to pay and a five-year payback period, the market potential in residential solar is estimated at 11 GW, even without capital subsidies. Currently, India boasts 11 GW of installed rooftop solar capacity, comprising commercial and residential installations, with only 2.7 GW in the residential sector.

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