Post Subsidy Scheme Cornered Residential Installations!
Updated: May 27, 2020
Year 2019-2020 can be considered as the deadliest financial year for Solar PV Plant installers till date, when market was preparing itself with steadily increasing demand in last few years. Sudden change in policy framework literally asked small EPC firms to shut their shops or shift focus on commercial installations.
What Policy Says?
Notification released on 20th, Aug., 2019 states that all installers need to quote post subsidy prices only which mean if a Solar PV Plant costs INR 60,000/kWp and subsidy is 40%(of benchmark or cheapest rate in the market) i.e., INR 20,000/kWp (Say) then company needs to collect just INR 40,000/kWp from customer and rest needs to be collected from Nodal Agency which is not released till date( as on 19th March, 2020). So the burning ratio is actually more than Ola, Uber, Zomato or Swiggy if we consider cash burned per order without any significant marketing discounts or cash-backs.
What Nodal Agencies are doing in various states?
According to new notification, now electricity departments of all states will be considered as new Nodal Agencies which are undoubtedly the most efficient govt. department in India if you have ever dealt with them at any point in your life while applying for new electricity connection or billing issue then of course you might happily choose not to install solar in your lifetime.
How much time end to end process takes for a subsidy case for completion?
Nearly 4 to 6 months. The policy framework is so much dependent on govt. departments that it might leave you more frustrated than ever, and might kill your environmentalist instinct if at all you have chosen to install solar plant in last one year.
Since launch of post subsidy notification there has been not a single application processed/subsidy released except for few cases in Gujarat. If MNRE is naive enough to believe that in 8 months just one state in India was able to install solar plants (for your information there are more than 100 vendors empanelled in almost every state on an average). Even if I compel myself to assume what MNRE is saying true (however BigWit Energy itself installed numerous plant and waiting for department to accept applications by these nodal agencies) then MNRE should be honest enough to believe that this policy is just degrading the market.
"2 of our customers in Punjab are waiting since last 8 months to switch on their systems."
Ever degrading installation qaulity!
This price binding, delayed subsidy disbursal, L1 prices often leaves vendors with just one option of cost cutting which translates to compromised installation quality. Unreliable structures, poor protection gears, unskilled technicians are very usual part of these plants which results in frequent breakdowns, leaking roofs, low generation and sometimes whole system goes away even in a mild storms.
Harsh Reality!
Subsidy is a rebate provided to individuals trying to adopt renewable energy but the way implementation process works this policy will leave many Solar EPC companies bankrupt and many customers without any after installation service since most vendors will end up by shutting their shops.
"This policy in total is just leaving customers and vendors with broken trusts, hollow promises and a lot financial pain which altogether is taking down standards of whole residential solar industry industry."
