Introduction: A National Goal, Local Challenges
India has committed to 500 GW of non-fossil fuel energy capacity by 2030, with solar expected to contribute nearly 280–300 GW. While the central government has laid out strong frameworks and subsidy schemes, the real implementation lies with states.
Unfortunately, policy inconsistencies at the state level — especially around rooftop and distributed solar — are slowing progress. To unlock India’s full solar potential, we need to understand where these gaps exist.
Why State-Level Policies Matter for Solar Adoption
Electricity in India is a concurrent subject — both the Centre and states share responsibility.
- The Ministry of New and Renewable Energy (MNRE) sets national policies and subsidies.
- But states control the critical details, including:
- Net metering approvals
- Tariff structures for exported solar power
- Grid connectivity timelines
- Open access rules for industries
The result is a patchwork of regulations, where what works in Gujarat or Karnataka may not work in Uttar Pradesh or Bihar — creating uncertainty for both consumers and investors.
Key Policy Inconsistencies Slowing Growth
1. Net Metering Caps and Restrictions
- Some states cap rooftop systems at 10 kW for homes or 1 MW for industries.
- DISCOMs often delay or deny approvals, citing technical limits.
- Settlement periods differ — monthly in some states, yearly in others — changing payback economics.
2. Tariff Variations and Unpredictability
- Surplus solar export tariffs vary widely (₹2.25/kWh in some states vs ₹4/kWh in others).
- Sudden retroactive cuts in tariffs have led to legal disputes and financial losses.
3. Open Access and Wheeling Charges
- C&I (commercial & industrial) projects face cross-subsidy surcharges, wheeling charges, and banking charges that differ by state.
- Some states restrict banking periods to 15–30 days, reducing project viability.
4. Delays in Approvals and Grid Connectivity
- Cumbersome paperwork and manual processes slow rooftop adoption.
- Lack of digital integration increases uncertainty for developers.
5. Lack of Uniform Subsidy Implementation
- Central subsidies under Pradhan Mantri Surya Ghar: Muft Bijli Yojana are often delayed at the state DISCOM level.
- Few states offer additional incentives, limiting uptake among residential consumers.
- Impact of Policy Fragmentation
- Rooftop Solar Lag → Less than 20% of India’s solar capacity comes from rooftops, far behind the target.
- Investor Hesitation → Developers avoid states with unpredictable or changing policies.
- Higher Costs for Consumers → Lack of scale keeps solar prices higher in restrictive states.
- Slower Industrial Adoption → C&I users — who could benefit the most — are discouraged by extra surcharges.
What Can Be Done to Harmonize Policies?
1. Central Guidelines with Minimum Standards
MNRE should enforce uniform net metering, open access, and tariff benchmarks across all states.
2. Digitalization of Processes
Expand national-level portals (like the rooftop solar portal) to all states for faster, transparent approvals.
3. Stable, Long-Term Tariff Policies
States must provide predictable, fixed-term export tariffs and avoid retroactive changes.
4. Standardized Banking & Wheeling Rules
A common framework for banking duration and wheeling charges would make C&I solar more attractive nationwide.
5. Capacity Building for DISCOMs
Train and incentivize DISCOMs to:
- Process applications efficiently
- Integrate rooftop solar smoothly
- View solar as a partner for grid stability, not a competitor.
Expert Insight
“Solar adoption is slowed less by technology or financing, and more by uncertainty. A stable, uniform regulatory framework will do more for solar adoption than any subsidy.”
— Dr. Ramesh Iyer, Energy Policy Expert