Empowering the Future: The Rise of Open Access Solar in India

Open Access Solar: Revolutionizing the Indian Solar Sector

Solar energy is growing at a rapid rate, with the Indian solar sector emerging as one of the fastest-growing in the world. Currently, the market is performing exceptionally well, and the open-access solar market is poised to drive the future of the Indian Solar Industry.

Record Low Solar Tariffs and Market Dynamics

Indian solar tariffs have reached a record low of INR 1.99 per kW, leading developers to sell energy directly to customers at agreed-upon rates.
The FY 2021-22 budget policy allows customers to choose their electricity provider, enabling developers to sell directly and opening new opportunities in India's solar energy sector.

Understanding the Open Access Solar Market

The open access solar market lets clients buy power directly from developers, bypassing the grid and benefiting from lower rates, while developers earn more. Industries with loads over 1 MW engage in long-term Solar Power Purchase Agreements (PPAs), with tariffs and fees regulated by the state. Developers must pay DISCOMs for using their distribution lines.

Categories of Open Access

Depending on the location of the electricity consumer and producer, Open Access is divided into two categories:

Inter-State Open Access: Involves customers and producers from different states, adhering to State Electricity Regulatory Commission laws.
Intra-State Open Access: Involves customers and producers from the same state, following the rules of the State Electricity Regulatory Commission (SERC).

Benefits of Open Access Solar

Sustainability: Solar power is a clean energy source, contributing to environmental sustainability.
High Solar Energy Sourcing: Businesses can source a considerable portion of their power from solar energy.
No Investment Model: The investment in a solar power plant is made by the developer or a third party, with no upfront costs for the consumer, who signs a long-term PPA.
Reduced Energy Costs: Solar power tariffs are significantly lower than conventional electricity costs.

Advantages Over Regular Power

PPAs: Long-term agreements at mutually agreed tariffs.
Consumer Benefits: Clean energy at lower costs without large upfront investments.

State-wise Open Access Fees

Variations: Fees differ across states, affecting the economics of renewable energy.
Examples: Karnataka and Andhra Pradesh have low charges; Gujarat, Haryana, and Maharashtra offer fewer incentives.

Growth of Open Access in India

The trend of increasing open access solar installations continued in 2022. India witnessed a significant 97% growth in the first half of the year compared to the same period in 2021, reaching 1.3 GW of new capacity.
This growth momentum carried over, with the second quarter alone registering a 223% increase compared to Q2 2021.
By June 2022, India's total installed open access solar capacity surpassed 6.5 GW.
Leading the pack are states like Karnataka, Maharashtra, Tamil Nadu, Uttar Pradesh, and Rajasthan, which contribute to around 75% of the total capacity.

Renewable Purchase Obligations (RPO) Trajectory

The Ministry of Power (MoP) in consultation with the Ministry of New and Renewable Energy (MNRE) has been proactive in setting long-term Renewable Purchase Obligations (RPO) for solar and non-solar power. However, the percentage of RPOs notified by State Electricity Regulatory Commissions (SERCs) varies across the country, and there was initially no clear penalty for non-compliance.

RPO Trajectory 2024-30

Failure to meet these targets will result in penalties of up to ten lakh rupees for each shortfall and additional penalties up to twice the price of each metric ton of oil equivalent, estimated at Rs. 3.72 per kWh of shortfall.

Green Energy Open Access Rules

The Ministry of Power notified the Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules, 2022, to ensure affordable, reliable, sustainable, and green energy for all. Key features include:

Promotion of Green Energy: Including energy from Waste-to-Energy plants.
Green Open Access: Available to consumers with a load of 100 kW and above.
Consumer Rights: Consumers can demand green power from DISCOMs, which are obligated to supply it.
Streamlined Approval Process: Time-bound processing and transparency in applications via a national portal, with a 15-day approval period.
Voluntary Green Power Purchase: Allowed for commercial and industrial consumers.
Open Access Charges: Defined charges, capping cross-subsidy surcharges, and removing additional surcharges to incentivize green energy consumption.
Uniform RPO: Across all obligated entities in a distribution licensee's area, including green hydrogen/green ammonia.
Green Certificates: Issued for consuming green power beyond the RPO.
Banking Facility: Provided by DISCOMs for GEOA consumers.

Conclusion

Open access solar allows consumers with significant power requirements to access affordable power from large off-site solar plants, meeting energy demands not covered by on-site solar installations. It provides a scalable solution to bridge the gap between limited rooftop space and higher grid prices. To explore more about solar plants and installations, schedule a call with us.