Collateral-free Loan, with Low Down Payment Key to Rooftop Solar Adoption

Customers opt for rooftop solar if the EMI is less than the savings on electricity bills


The upfront investment can more often dissuade potential customers from adopting rooftop solar. However, the hesitation can be overcome with a collateral-free loan with monthly installments lower than the savings on energy bills, N.P. Ramesh, the COO at Orb Energy, an end-to-end solar solutions provider, said.

Ramesh spoke to Mercom in an exclusive interview about the costs, savings, and financing required for rooftop solar systems.

What is the trend you are seeing toward rooftop solar adoption among MSMEs?

Import duty on solar panels increased the price of the rooftop solar systems and pushed the payback for the customer. Since the price increase was substantial (almost 30% for Indian-made module suppliers), many customers have postponed their decisions.

What is the cost of a 100 kW rooftop solar system, and what are the typical savings for customers?

Every business or home has different energy requirements, so the cost will vary. For C&I systems with mono PERC solar modules, the price ranges from ₹42 (~$0.51)/W- ₹45 (~$0.54)/W, which amount to ₹8.5 million (~$103,681) for a 200 kW solar system.

For the C&I segment, the amount invested for installing solar generally pays for itself in approximately 3-3.5 years, effectively making it free electricity after this period. After considering all costs, the savings over 25 years would translate to about ₹44 million (~$536,729) for a 100 kW rooftop solar system.

How are government subsidies for rooftop solar helpful?

Government subsidies are currently available for residential systems up to 10 kW. The process of availing these subsidies has been streamlined with the claim process through the National Portal.

The customer can now decide whether to consume the energy generated from the solar system or export it to the grid. In some states, the net metering tariff which the customer can get on the export of energy is reduced based on whether the subsidy is availed or not.

For C&I customers, an accelerated depreciation benefit of 40% per annum helps customers make their buying decision and acts almost like a subsidy.

What is the biggest impediment in consumers not opting for rooftop solar? What’s the main hesitation?

Most customers today know about solar and how it can reduce their electricity costs. The biggest challenge is that it is not a priority for most.

Solar is an upfront capital cost, and in most cases, a large investment for customers who are used to paying monthly electricity bills requires substantial planning for the additional expenditure.

What can boost the rooftop solar installations among C&I consumers apart from addressing policy challenges?

Orb Energy offers collateral-free financing for customers with a low down payment for tenures ranging from three to five years. In most cases, the EMI amount the customer pays is less than the savings in their electricity bill. This helps the customer own the solar system.

A tax break could go a long way in helping customers prioritize solar. This would also help the government achieve targets for rooftop solar, thereby helping the distribution companies reduce their dependence on costlier thermal power.

We feel that solar rooftop financing with no collateral can help boost solar installations with C&I consumers; that’s what we specialize in.

Do you expect a strong year for installations compared to 2022?

We feel that 2023-24 could be a better year for solar rooftop installations as:

The price increase on account of basic customs duty (BCD) for the customer is over one year old, and the customers have started adjusting to the new pricing. The electricity rates across many distribution companies (DISCOMs) have increased, which helps in improving the payback period, and the module prices are currently more stable (with a slight downward trend), helping the pricing.

What is your view on virtual and group net metering?

Virtual and Group Net metering is a good step for customers with multiple meters having the solar system either on the rooftop or off-site and the solar energy being fed into the grid. But it needs to be seen whether the customer would be allowed to offset the energy in units generated vs. consumption (like net metering on premises) or whether there would be a reduction in the electricity bill based on a price the Discom would buy the solar energy which is low (like gross metering).