Solar rooftop Consumer Financing Scheme case of Vishakhapatnam

Background

Andhra Pradesh Eastern Power Distribution Company Ltd. (APEDCL) realized the potential to curtail revenue losses by promoting solar rooftop for serving low consumption, low income consumers.

Promoting use of rooftop solar for such consumers could also result in lowering cross-subsidy surcharge on high paying consumers, while reducing delivery cost for the discom. This led to the APEPDCL initiating plans to developing the Vishakhapatnam Solar Rooftop Pilot scheme targeting domestic consumers with less than 200 units consumption per month.

To make implementation possible, a number of challenges had to be addressed first.

• Limited access to finance for low income consumers;
• Lack of knowledge about technology, vendor, administrative procedures;
• Limited capacity of putting up up-front capital to set up system; and
• Higher perceived technology and financial risks.

Implementation agencies

The scheme was jointly developed by the Government of Andhra Pradesh, APEPDCL, and NREDCAP with Andhra Bank acting as the financial partner.

Key Objectives of the Vishakhapatnam Pilot Scheme

• Promote clean energy, meet solar rooftop target, and no cost solar RPO compliance.
• Reducing low tariff paying consumer’s (highly cross subsidized consumer’s) dependability on APEPDCL.
• Help target consumers in access to easy and low cost finance.
• Demand aggregation and quality assurance.
• To proactively promote solar rooftop by creating a win-win situation for all the key stakeholders, primarily the APEPDCL.
• Lower cross subsidy burden on high tariff paying consumers.
• Lower Government of Andhra Pradesh tariff subsidy burden.

Scheme details

Under the scheme, APEPDCL is facilitating setting up of 1 kW solar rooftop systems at the premises of domestic consumers using less than 200 units a month, financed with help of Andhra Bank. Consumers do not incur any up-front cost. Capital expenditure required for the system is split into three tranches: 50% of total is paid in the form of subsidy by MNRE (30%) and the Government of Andhra Pradesh (20%), and remaining 50% is provided as a long term loan from Andhra Bank. The consumer repays the loan as equated monthly installments (EMI) to APEPDCL.

Outcomes

One of the interesting feature of this scheme is that prior owning a rooftop system, the monthly bill of participating consumers was in the range of INR 400-500 per month. Consumers subscribing to the scheme will incur an additional EMI burden of about INR 900 per month. However, the possibility of asset ownership, significant reduction in electricity bill in future, easy access to finance, timely disbursement of subsidy clubbed with the aspiration to reduce one’s carbon footprint has resulted in 600 applicants registering for this scheme, this is equivalent to 600 kW of solar rooftop systems of 1 kW each in Vishakhapatnam itself.

To read the full case study, click here. 

Source : SPIN