What C&I Customers Need to Consider Before Installing Rooftop Solar Panels

It is important to remember that rules and regulations vary by state, so research your locality first.


It has become apparent that solar energy will play an essential part in the future of India, and C&I customers across the country are debating whether the reward is worth the investment.

Rooftop solar has been gaining popularity among C&I companies because of the promise that it reduces energy costs significantly. Plus, they hope they can profit from the surplus energy by injecting it back into the grid through metering arrangements.

The result has been that India added 3.3 GW of rooftop solar capacity in 2021 (1.7 GW) and 2022 (1.6 GW), according to Mercom India Research’s newly released 2022 Q4 & Annual Mercom India Rooftop Solar Market Report.

The commercial and industrial (C&I) sector accounted for approximately 67% of all solar installations in 2022, up from 59% in 2021.

“Apart from the energy bill, we also ask why the customer wants to go solar. Some companies want to do it for green credits, while others are attracted to the rate of return on investment,” Harsha Kuntur, Managing Director at EcoSoch Solar, told Mercom.

But despite the initial interest in adopting solar, businesses are often overwhelmed by the myriad of options, the complicated regulations, and the difficulty in understanding if the investment will pay off.

“The payback period for the C&I sector is around four to five years. Also, we look for the type of investments, and accordingly, we suggest the appropriate financial mechanism to support them,” Kuntur said.

For C&I companies taking the transition seriously, the first step would be to review the checklist below and determine if it is a positive fit.

  • Calculate monthly power consumption, including sanctioned load.
  • Get multiple quotes to identify a suitable rooftop solar installer.
  • Identify the right rooftop solar system capacity for your energy needs.
  • Examine the surface area available for a rooftop installation.
  • Select the appropriate technology and peak-watt solar modules.
  • Identify the metering options for your system depending on the state regulations

What kind of cost savings should a customer expect? 

A rooftop solar installation makes economic sense only if it is above a certain capacity threshold, as experts say that smaller systems are not ideal for higher financial returns.

“Any consumer with 10,000 square feet of surface area can accommodate a 100 kW rooftop system, generating 12,000 units per month. A consumer using 10,000 units per month with a surface area of 10,000 square feet can adopt solar through a rooftop system,” said Mohammad Ikram, Regional Manager at Dexler Energy, a rooftop installer.

Ikram added that the cost varies from ₹40,000 (~$484.13)/kW to ₹50,000 (~$605.17)/kW.

Hitaksh Sachar, Director at Asun Solar, a rooftop solar EPC company, said the fundamental reason C&I consumers pursue rooftop solar is to reduce energy consumption from the grid to save costs.

“The payback period should not exceed three to four years, and the monthly consumption for C&I consumers should be at least 10,000 units,” he said.

In states like Karnataka, retail tariffs are around ₹10 (~$0.122)/kWh and nearly ₹8 (~$0.097)/kWh for commercial and industrial consumers, so consumers have the potential to save a lot of money on their power bills.

Further, for a 1 kW system, which generates nearly 120 units per month, a commercial consumer can save up to ₹1,200 (~$14.57)/kW per month, whereas an industrial consumer can save up to ₹800 (~$9.71)/kW per month based on the electricity bill for the month. Here the upfront cost has not been considered.

Business owners may also want to pursue Capital Expenditure (CAPEX) or Operational Expenditure (OPEX) financing options for rooftop solar, depending on regulations in individual states. Consumers often prefer the OPEX model, which increases the likelihood of cost savings without any upfront capital investment.

At the end of the day, the most important part of installing a rooftop solar system is evaluating the monthly consumption pattern so that the installers can suggest the most viable option.

How to understand sanctioned loads and other regulations 

Installing a solar farm does not mean a C&I corporation can use as much electricity as possible. They will be allocated a sanctioned load by their distribution companies, which, if crossed, usually results in a fee.

In most Indian states, the sanctioned load is set at 80%-100% of total capacity, meaning it would require an exceptionally busy period to incur the fine. However, states like Jammu and Kashmir restrict the size of a system to 50% of total capacity. So, make sure to check the rules in your locality.

The surface area required for a rooftop solar system is 65 to 75 sq. ft for a 1 kW system, which needs to be certified and approved by the rooftop installer to ensure it can meet strength and stability requirements. Plus, the availability of rooftop space is not all that is required, as the area must be free from shadows or other forms of interference.

The suitability of a rooftop to accommodate a specific capacity can only be gauged by an installer after a thorough assessment.

“First of all, we survey the area with the help of Google Maps. Then, based on the consumers’ electricity bills, we suggest whether they should opt for rooftop systems or open access,” a top executive from a leading rooftop installer said.

The consumers must also factor in the net metering approval period, which can take between three to four months, depending on the state. So, make sure the company is not on a tight deadline because, even if the system is built, there will be a lag before it can be switched on.

Can a company with high electricity demand tap into solar?

The short answer is “yes,” but it will probably lean on open access power.

While rooftop installations can be valuable for smaller C&I consumers with readily available infrastructure, those with over 1 MW of consumption would typically opt for open access because there is unlikely enough space on the rooftop to fit a large installation.

The executive who wished to remain anonymous said 1 MW is usually the minimum electricity power usage allowed for open access approval. “Depending on the consumption and the related regulations in the state, the consumer with 1 MW of contracted capacity can avail 1 MW of open access.” the executive said.

As per the Green Open Access Rules 2022, the contacted load capacity has been reduced to 100 kW.

Another important factor in the final decision is whether state regulations are favorable to a rooftop installation.

Amritesh Soora, Assistant General Manager at Sunsure Energy, a rooftop installer and open access developer, said regulators will calculate how much power the consumer is allowed to be used.

“This would factor in aspects such as operational working days, time of day of the client, the banking facilities available in the state, and charges applicable on solar power generation by rooftop versus open access,” he said

To dive deeper into whether solar installations could work for your C&I, Mercom India is running its second annual clean energy meet series, “C&I Clean Energy Meet 2023,” which provides a unique offline platform for the country’s C&I consumers to interact with renewable energy experts and understand the benefits of including renewable sources in their energy mix.

C&I entities planning to go green are recommended to attend the event in cities of their choice.

The schedule can be found here.

Contact us by filling out this form if you are planning to install a rooftop solar system for your C&I units.


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