Rooftop Solar – Garnering Support from Distribution

Utilities

September 2017
Introduction

• Solar Rooftop – a major focus area for Govt. of India – 40 GW target

• Solar Rooftops comes with several benefits but it also has some un-intended impacts
on traditional utility business models

• Key Outcomes of Study

‒ Mapping key benefits and impact of rooftop solar projects
‒ Identify changes to the existing models to balance the interests of utilities, regulators,
prosumers and consumers (non-solar)

• Study supported by Shakti Sustainable Energy Foundation

@ 2017 Deloitte Touche Tohmatsu India LLP

 Proliferation of rooftop solar globally

• Solar rooftop segment has seen rapid proliferation in countries like USA, Germany, United
Kingdom, Japan etc.
• Business models adopted vary across countries, some key learnings on challenges for utility
are :
1. Reduction in sales volume due to large procurement from solar rooftops
2. Difficulty in recovery of fixed cost because of long term purchase agreements & already
installed infrastructure (dependence on volumetric sales)
3. Difficulty in recovery of cross-subsidy charges due to migration of high paying consumers
from the utilities to solar rooftop; high number of consumption slabs
4. Managing variability in generation of solar rooftop for variable load
5. Injection of solar power during off-peak periods and withdrawal by the consumers during
peak periods (consumers not covered under TOD)
6. Treating utility grid as a backup power source by rooftop consumers (no banking charges)
7. Technical issues like phase imbalance due to solar rooftop projects, quality of utility
power, etc.
8. Increase in administration burden (application processing, inspection, connectivity,
metering and billing etc.)
9. Safety and security issues during operation and maintenance of grid
3 @ 2017 Deloitte Touche Tohmatsu LLP
 Approach for the Study

Base Data BASE CASE ANALYSIS (FY 2022)

Last 3 years, Projections next 3
/5 years
17 State Utilities
• Revenue loss to utility
Rooftop

Rooftop Solar Capacity covered

Solar

• Cross subsidy loss/Benefit to utility

targets State wise 1. Maharashtra
• Impact on Grid Charges collection by utility
MNRE Year wise targets • Deemed RPO benefits to utility (MSEDCL)
• Banking Charges loss to utility 2. Delhi (TDDPL,
• Environmental benefits from rooftop solar generation BRPL, BYPL)
Performance Parameters

Revenue
3. Odisha (CESU,
Utility- Financial

Tariff NESCO, WESCO,

• Rooftop Solar energy penetration scenario by FY 2022
Cost of Supply • Rooftop PV capacity (MW) penetration scenario for FY SOUTHCO)
2022 4. Telangana
Power Purchase • State wise mapping of hourly rooftop PV generation (TSNPDCL,
and peak demand TSSPDCL)
Fixed Cost / Grid Charges • State wise mapping of monthly rooftop PV generation
and peak demand
5. Andhra Pradesh
• Time of day (TOD) tariff structure across select utility (APEPDCL,
Power Demand Profile
APSPDCL)
Operation Parameters

states & how it will support rooftop solar generation

Power Supply Profile 6. Tamil Nadu
(TANGEDCO)
Utility –

Number of Consumers • Avoided Capacity & avoided energy during peak hours
7. Gujarat (PGVCL,
Power consumption across DGVCL)
category 8. Uttar Pradesh
• Active & reactive power support – rooftop solar generation
T & D Loss (DVVNL, PVVNL)

4 @ 2017 Deloitte Touche Tohmatsu India LLP

 Different Cases & Scenarios analyzed as a part of analysis

Case -1: Overall impact on Utility’s revenue

A
Scenario 1 - Highest tariff rate
paying consumers switches to
rooftop solar
considering Env. benefits, Deemed RPO, Grid
& Banking charges
Case -2: Impact of Cross subsidy considering
Env. benefits, Deemed RPO, Grid & Banking
charges
Case 3: Impact assuming no Cross subsidy
with no Env benefits and Solar REC price @
Rs 0.5 per unit

Case -1: Overall impact on Utility’s revenue

considering Env. benefits, Deemed RPO,
B Grid & Banking charges
Scenario 2 - Average tariff
rate paying consumers
Case -2: Impact of Cross subsidy
switches to rooftop solar
considering Env. benefits, Deemed RPO,
Grid & Banking charges

5 @ 2016 Deloitte Touche Tohmatsu India LLP

 Case 1 - Highest tariff paying consumers switches to rooftop solar
Scenario-1: Overall impact on Utility’s revenue considering Env. benefits, Deemed RPO, Grid & Banking charges

Overall Impact on Utility - FY 22 (INR per Unit)

6

0
Rs. /kWh

-1.29 -1.89
-2 -2.87
-1.94 -3.03
-4 -3.04 -3.26 -3.92
-3.09 -5.75
-5.45 -5.45 -5.59
-6
-6.27 -6.81
-7.30 -6.49
-8

-10

-12

DVVNL
BSES R

BSES Y

NESCO

APEPDCL

APSPDCL

TSNPDCL

DGVCL
TPDDL

WESCO

PVVNL
MSEDCL

SOUTHCO
CESU

TSSPDCL

TANGEDCO

PGVCL
Maha Delhi Odisha AP Telangana TN Gujarat UP

Revenue reduction Grid charge reduction to utitliy (10%) Banking charge loss to utility
Deemed RPO benefits T& D loss benefits Environmental benefits

Utilities with low energy charge have lower negative impact. Utilities having high T&D losses will gain
from rooftop solar
6 @ 2017 Deloitte Touche Tohmatsu LLP
 Case 1 - Highest tariff paying consumers switches to rooftop solar
Scenario-2: Impact of Cross subsidy considering Env. benefits, Deemed RPO, Grid & Banking charges

7 Overall Impact on Utility - FY 22 (INR per Unit) 10

5
5
5.66 5.39
5.01
3 4.24
3.27 3.33 3.10 3.49 3.18
2.46 2.13 2.21
1.07 1.12 0
Rs. / kWh

1 0.54 0.68
-0.10

-1
-5

-3
-10
-5

-7 -15
NESCO
BSES R

BSES Y

DVVNL
APEPDCL

APSPDCL

TSNPDCL

DGVCL
TSSPDCL

PVVNL
MSEDCL

TPDDL

CESU

SOUTHCO

WESCO

PGVCL
TANGEDCO
Maha Delhi Odisha AP Telangana TN Gujarat UP
Cross-subsidy loss Grid charge reduction to utitliy (10%) Banking charge loss to utility
Deemed RPO benefits T& D loss benefits Environmental benefits
Total

Utilities with low level of cross subsidy levels will have lower impact. Consumer categories having
@ 2017 Deloitte Touche Tohmatsu LLP
7 energy charge lower than CoS & adopting rooftop solar will benefit utilities.
 Case 3 – Highest Tariff paying consumers switches to rooftop solar
Scenario: Impact assuming no Cross subsidy with no Env benefits and Solar REC price @ Rs 0.5 per unit

5 Overall Impact on Utility - FY 22 (INR per Unit)

3 2.44

1.25 1.42 1.48 1.47

1.02 1.15 1.19 1.08 1.20 1.03 1.02 1.01
1 0.64
0.14 0.28
-0.13

-1

-3

-5
BSES R

BSES Y

DVVNL
NESCO

APEPDCL

APSPDCL

TSNPDCL

DGVCL

PVVNL
MSEDCL

TPDDL

PGVCL
SOUTHCO
CESU

WESCO

TSSPDCL

TANGEDCO
Maha Delhi Odisha AP Telanga TN Gujarat UP
Cross-subsidy loss Grid charge reduction to utitliy (10%) na Banking charge loss to utility
Deemed RPO benefits T& D loss benefits Environmental benefits
Total

8 @ 2017 Deloitte Touche Tohmatsu LLP

 Recommendations

1. Rationalization of Consumption Slab

2. TOD framework on net-metered consumers ?
3. Allow surplus solar power injection during peak time. Promote peak-time solar injection
through attractive tariffs/ incentives – storage solutions – change in TOD design if req.
4. De-Coupling of Import and Export tariff under Net Metering : Import tariff will be energy
charge and export tariff can be capped at rooftop solar FIT or linked as % of energy charge
• Utility command regulatory framework for control & Instrumentation functions to enable
advance inverter regulations in Indian context need to be prepared and framed.
Compensation mechanism for loss on account of active power curtailment (Long term
Initiative)
• Reactive tariff & standards : Advance Inverters can be used to provide voltage regulation for
improvement of tail end voltage profiles. Incentive/tariff mechanism and level of incentives
for adopting advance inverter functionality (Short term Initiative)
• Explore utility driven rooftop solar models
• Support to Discoms to facilitate implementation of rooftop solar - web-portal for online
processing of application

9 @ 2017 Deloitte Touche Tohmatsu LLP

Thank You
For more information, please contact:

Rajneesh Sharma
Senior Manager | Consulting – Energy & Resources
Deloitte Touché Tohmatsu India LLP
7th Floor; Building 10, Tower B, DLF Cyber City Complex, DLF City
Phase – II,
Gurgaon - 122002, Haryana, India
Phone: +91-9971798764
Email: rajneeshs@deloitte.com

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are
legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/about for a more detailed description of DTTL and its member firms.

This material and the information contained herein prepared by Deloitte Touche Tohmatsu India LLP (DTTILLP) is intended to provide general information on a particular subject or subjects and is not an exhaustive
treatment of such subject(s). None of DTTIPL, Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the “Deloitte Network”) is, by means of this material, rendering professional advice
or services. The information is not intended to be relied upon as the sole basis for any decision which may affect you or your business. Before making any decision or taking any action that might affect your personal
finances or business, you should consult a qualified professional adviser.

No entity in the Deloitte Network shall be responsible for any loss whatsoever sustained by any person who relies on this material.

©2017 Deloitte Touche Tohmatsu India LLP. Member of Deloitte Touche Tohmatsu Limited