Delhi Proposes 4.5 GW of Solar Capacity by 2027 Under New Solar Policy

This includes 750 MW of rooftop solar and around 3,750 of utility-scale solar


The Delhi government has announced plans to install 4,500 MW of solar capacity, including 750 MW of rooftop solar within the state and around 3,750 MW of utility-scale solar outside the state by 2027 under the new Solar Energy Policy 2023.

The policy, which will be effective for three years, aims to boost solar power generation significantly to meet renewable purchase obligation (RPO) targets.

This policy will apply to any solar energy generating system with a capacity of 1 kWp or more. It applies to all electricity consumers and entities that set up or operate solar power projects in Delhi.

Residential customers undertaking solar projects will receive a capital subsidy of ₹2,000 (~$24)/ kW, capped at a maximum of ₹10,000 (~$120) per consumer from the Delhi Government. This subsidy will be reflected in their initial electricity bill following the commissioning of their rooftop solar system.

Addressing space constraints

Due to space constraints, consumers in Delhi face limitations when installing rooftop solar modules. According to the latest guidelines issued by the Delhi Electricity Regulatory Commission (DERC), they would now have alternative options to access solar energy.

Under the new regulations, consumers with limited rooftop space can opt for group net metering and community solar models. Group net metering allows consumers with multiple buildings or service connections to benefit from excess solar energy generated on other properties within the same DISCOM territory. This facilitates the efficient utilization of rooftop space for solar energy generation, particularly for consumers with multiple properties.

Additionally, the introduction of community solar allows consumers without suitable rooftops, such as those living in apartments or with small or shaded roofs, to benefit from solar energy. The energy produced by a collectively owned solar system will be fed into the grid through an energy meter, and the exported energy recorded by that meter will be pro-rata credited to the electricity bill of each participating consumer based on ownership share.

The Delhi Government will collaborate with DERC to facilitate the implementation of Community Solar for all consumers. A digital platform will be established to match rooftop owners willing to install solar projects with those in need. Consumers without rooftops can purchase ownership of rooftop solar projects and receive net metering benefits based on their ownership share.

Community solar will apply to both residential consumers and government agencies. However, commercial and industrial consumers cannot benefit from this model.

Furthermore, the guidelines introduce Peer-to-peer (P2P) energy trading, allowing consumers with solar installations to sell excess electricity generation in real-time. The P2P energy trading platform will serve as an online marketplace, enabling the buying and selling of rooftop solar energy between grid-connected parties within the same DISCOM area.

In collaboration with DERC, the Delhi Government will develop the necessary policy framework and regulations to support P2P energy markets, ensuring transparency and efficiency in the trading process. These initiatives aim to expand consumers’ access to solar energy in Delhi and promote sustainable energy practices across the region.

Addressing capital constraints

Consumers in Delhi facing capital constraints can access models under the Renewable Energy Service Company (RESCO) mode to adopt solar energy.

One such model is the conventional RESCO model, where consumers enter into a power purchase agreement (PPA) with a solar developer/installer for a fixed period, typically 25 years. Under this arrangement, the developer covers the capital expenditure for installing the solar system and charges the consumer a fixed tariff throughout the PPA. Interested consumers can connect with RESCO developers through the state solar portal to initiate direct contractual arrangements. Additionally, eligible consumers adopting the RESCO model can avail themselves of net metering benefits, the Ministry of New and Renewable Energy (MNRE) capital subsidy, and Delhi’s Generation-Based Incentives (GBI).

To expedite the installation of solar rooftop systems on all Delhi government buildings or properties with rooftop areas exceeding 500 sq.m., the government will aggregate demand and issue centralized tenders under the CAPEX and RESCO models. For the CAPEX model, the consumer department will bear the installation and operation & maintenance costs.

A Hybrid RESCO model is introduced through the Delhi Solar Energy Policy 2023 to address the limitations of the conventional RESCO model and promote widespread adoption of solar systems among consumers facing capital constraints. This model combines net-metering agreements between consumers and DISCOM with a Tripartite agreement involving RESCO developers, DISCOM, and consumers.

Under the Hybrid RESCO model, developers receive payment directly from DISCOM via the Tripartite Agreement, while DISCOM bills consumers for solar power consumed at the PPA rate. This billing occurs as part of a unified bill for energy consumption, including solar energy and grid-imported electricity. The PPA tariffs for the Hybrid RESCO model will be determined through a competitive bidding process.

In collaboration with DERC, the government will issue detailed guidelines for the Hybrid RESCO model to ensure effective implementation following the policy notification. These initiatives aim to facilitate the widespread adoption of solar energy among consumers in Delhi, promoting sustainability and reducing dependency on conventional energy sources.

The hybrid RESCO model will apply to residential, commercial, and industrial consumers. However, government agencies cannot avail of this model.

Economic Incentives

Additional benefits are available for group housing societies and residential consumers under the Delhi Solar Energy Policy. Residential systems up to 10 kW are eligible for a capital subsidy provided by MNRE until March 31, 2026. Moreover, group housing societies and residential welfare associations with systems up to 500 kW, at 10 kW per house, can also benefit from a capital subsidy from MNRE.

Furthermore, residential consumers can enjoy reduced upfront costs for mounting structures for rooftop solar projects, facilitated through a capital subsidy.

Generation-based Incentives (GBI)

Under this policy, domestic, commercial, and industrial consumers are eligible for GBI payments for five years from the commissioning date of the system, provided it is installed within the policy’s operative period. The incentive amount is determined based on the system size (kW) and gross solar generation (per kWh), with no minimum threshold or maximum cap on solar generation.

GBI payments will be adjusted against the electricity bills issued by DISCOM, and any excess amount will be disbursed to the consumer’s bank account monthly within seven days of the billing cycle’s completion. The monthly adjustment of GBI against electricity bills applies to existing and new rooftop solar consumers, except those under the hybrid RESCO model.

The GBI rates vary based on the type of consumer, with higher incentives offered to smaller systems to make rooftop solar more attractive for consumers with lower energy consumption. Additionally, consumers adopting solar through Community Solar models are also eligible for GBI based on their ownership share of the solar system.

In the case of hybrid RESCO models, the GBI is directed to the RESCO developer, as they own the solar plant. The policy also introduces an early-bird GBI incentive for the first 200 MW of deployment, specifically targeting commercial and industrial consumers, aiming to overcome capital constraints and accelerate adoption.

The GBI incentive becomes effective from the date of policy notification, and streamlined procedures will be established for timely reimbursements to DISCOMs every three months.


The government will introduce a new state solar portal to streamline the process for consumers interested in solar energy. This portal will serve as a centralized platform providing comprehensive information on installing solar modules, including benefits, guidelines, regulations, maintenance procedures, pricing details, and timelines.

All new net metering applications across Delhi’s DISCOMs will be submitted through this portal, allowing consumers to track their application status conveniently.

To simplify the application process for rooftop solar, procedures across DISCOMs will be standardized, ensuring consistency. This includes providing standardized versions of relevant documents such as net metering applications.

Consumers opting for the capex model, paying upfront for the rooftop solar system, can use the state solar portal to connect with technically qualified developers registered on the platform.

Furthermore, vendors will be registered or empaneled through the National Portal under the MNRE Rooftop Solar Phase II program, facilitated by the Energy Efficiency & Renewable Energy Management (EE&REM) Center. Additionally, solar projects with capacities up to 500 kVA will be exempt from inspection by electrical inspectors.


Solar projects must be installed on all existing state government properties with 500 sq.m. rooftop areas. This deployment will be carried out gradually and in phases within the operational period of this policy.

According to the amendment to the Unified Building Bye Laws for Delhi, 2016, dated March 8, 2019, all new residential, institutional, government, commercial, group housing, and industrial buildings must install rooftop solar systems, subject to meeting the minimum area requirement. The government will collaborate with local bodies to strictly enforce this mandate.

The policy promotes solar deployment on agricultural land through various models within applicable statutes and laws, including group net metering and community solar.

Out-of-state solar procurement

Delhi government will collaborate with DISCOMs and other stakeholders like SECI to efficiently plan and execute utility-scale solar generation projects outside Delhi to purchase solar power.

This initiative aims to meet Delhi’s growing energy demands by harnessing solar energy instead of relying on long-term power purchase agreements based on conventional fossil fuels.

Indraprastha Power Generation Company (IPGCL) will explore implementing large-capacity solar projects outside Delhi under the CPSU Program Phase-II of MNRE to benefit from central financial assistance.

DISCOMs will be encouraged to enhance the proportion of solar energy procured from outside Delhi through innovative models like Round the Clock Renewable Energy (RE-RTC), which integrates various renewable energy sources, such as solar and wind, along with appropriately sized battery storage, to provide round-the-clock power per Delhi’s demand curve.

Rooftop assessment

The government will facilitate rooftop assessments upon consumer request through the state solar portal or helpline to promote the adoption of rooftop solar systems. Following the assessment, consumers will receive a ‘solar report card’ detailing the potential solar generation capacity and annual savings on their electricity bill.

This report card will also feature a ‘solar score’ indicating the percentage of electricity consumption that can be met through rooftop solar power. The solar score will be included in monthly electricity bills issued by DISCOMs, along with estimated savings.

An Apex Committee, led by Delhi’s Power Minister, will oversee policy implementation and address any issues. It will comprise members from various government departments, DISCOM CEOs, and industry experts.

The Delhi Solar Cell, within the EE&REM Center, will assist the apex committee and monitor day-to-day policy implementation, maintain a solar portal, and launch awareness campaigns.

DISCOMs are encouraged to set annual solar deployment targets, facilitate various solar deployment models, and streamline the net metering process.

IPGCL will aggregate capacity on government building rooftops, implement solar installations, and explore rooftop solar under the CPSU Program Phase-II. They will also train workforce in solar system technology.

In December 2022, the Delhi Government released a draft solar policy that targeted a 6,000 MW solar capacity target by 2025.

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