India is one of the world’s top emitters of greenhouse gases as well as one of the nations most affected by climate change and its consequent heatwaves, floods, and other natural disasters. Appropriately, therefore, India has ambitious targets to reduce emissions and achieve net zero by 2070. The energy sector is India’s biggest source of emissions, with fossil fuels supplying 76% of India’s electricity. While the government is investing in large centralised wind, water, and solar energy farms, decentralised renewable energy, particularly rooftop solar systems (RTS), is vital in India’s transition to a sustainable future. The commercial sector, which is experiencing unprecedented growth and increasingly dominates India’s cityscapes, will be a key piece in the puzzle of urban India’s green energy future. However, despite substantial subsidies and other incentives, RTS adoption by the urban commercial sector is lagging.
Urban commerce is energy-thirsty but lags in RTS adoption. PULL explores why
In 2018-19, India’s commercial sector consumed 8% of all energy generated, i.e. almost 93,000 GWh. Given a national average of 0.82 kg carbon dioxide equivalent (CO2e emitted) per kWh of energy produced, this means that India’s commercial sector produced approximately 76.26 tonnes CO2e that year. And India’s commercial sector, along with its power consumption, has only grown since then, and rapidly. A majority of India’s commercial establishments (including small and medium businesses) are located in cities. Indian businesses have cumulatively adopted only about 12 GW of RTS so far, a minuscule fraction of the total energy they consume. Given the size, growth rate, and energy demands of urban commerce, it’s crucial for this sector to adopt RTS more widely.
People’s Urban Living Lab (PULL) undertook field research this year exploring the causes of this lag; PULL is now developing interventions to increase RTS adoption by urban commerce. PULL’s research involved conducting semi-structured interviews with a representative sample of urban business owners of varying sizes and types; data from these interviews were subjected to thematic analysis. This work, undertaken in collaboration with Goa Energy Development Agency (GEDA), is part of PULL’s ongoing efforts to help urban India transition to a future that is both equitable and sustainable. This work is discussed here.
Causes of low RTS adoption by urban commerce
High upfront installation cost:
Upfront costs of installing RTS are substantial, especially for battery-backup (“hybrid”) RTS systems, which can help shield businesses against powercuts. While RTS subsidies from the national government are only disbursed to households, some state governments offer separate subsidies to businesses, as well as other incentives such as tax breaks, to reduce the upfront financial burden of RTS. However, it’s useful to note, in this context, that the ‘subsidy’ is actually a rebate, which can take many months to arrive. PULL’s field research suggests that having to pay the full cost of RTS upfront, then waiting indefinitely for government reimbursement, limits RTS adoption by urban businesses.
Lack of awareness of available financing schemes:
Besides subsidies, urban businesses have other financing schemes open to them, including CAPEX and RESCO. CAPEX offers a scheme whereby a business that rents, rather than owns, the property it operates from can still benefit from RTS if the property owner chooses to install RTS. The property owner instals and owns RTS, while the business owner benefits from the power generated. A contrasting scheme involves the Renewable Energy Service Company (RESCO) installing, financing, and owning a rooftop solar installation, with the property owner buying and using the solar power generated from the system.
PULL’s research suggests that awareness of these financing schemes among urban business owners is very low. RTS adoption is thus likely to be limited to business owners with the means to finance RTS in full upfront. Many business owners expressed concern about the environment, but the substantial cost of RTS was a larger factor in their decision making, especially given that RTS is a relatively new technology still widely perceived to be risky.
Lack of awareness of types and suitability of various RTS panels and systems:
PULL’s research also suggests that business owners lack awareness of the various available types of RTS systems (on-grid, off-grid, and hybrid) as well as RTS panels (monofacial vs. bifacial; monocrystalline vs. polycrystalline). Information related to how RTS functions, and which type of system/panel is best suited to a given business, is understandably difficult for a busy business owner to navigate. Among the study participants, many businesses had simply purchased whatever system/panel was offered by an RTS vendor whom they already happened to know. Predictably, post-purchase satisfaction was variable. For instance, some business owners had assumed that installing RTS would prevent the business from experiencing powercuts, whereas this is only likely to be true for RTS systems with battery backups (and might not even be true then, depending on the ratio of power generated to power consumed).
Low demand by clients:
PULL’s research finds that a major factor in a business owner deciding to adopt RTS is demand by clients. Many business owners report little client demand for sustainable operations. However, with environmental awareness rising in India and globally, and with India becoming a global tourist destination, this is likely to change, and urban businesses are likely to face increasing bottom-up pressure to invest in RTS and other low-carbon operational measures.
Inadequate rooftop space:
Inadequate free rooftop space, combined with the substantial space required by typical solar systems available in India (8-12 sq m for 1 KwH), constitutes another barrier. In this regard, architects and engineers, as well as government authorities such as the Energy Conservation Building Code (ECBC), must play a key role in ensuring that, going forward, urban commercial buildings are designed with adequate rooftop space to install enough RTS to meet a substantial proportion of their energy needs.
A way forward
PULL’s research suggests that solar panels and/or solar water heaters on urban commercial rooftops greatly increase the visibility of RTS to the general public. Given that awareness of RTS among the typical urban Indian is relatively low, RTS adoption by urban businesses will be key to spreading awareness and uptake. PULL’s research finds other trickle-down effects: for instance, when a business owner successfully instals and uses RTS on a commercial establishment, he/she becomes likely to install RTS on other commercial/residential properties that he/she owns. PULL’s research further suggests that not just visual visibility but also positive word-of-mouth recommendations are key to the diffusion of RTS use among current users’ social networks.
Wider RTS adoption by India’s urban businesses would thus not only make a substantial direct contribution to India’s net-zero future, but would also have massive trickle-down effects and encourage sustainable energy consumption across sectors. PULL envisions a future where urban Indian businesses utilise available rooftop and other spaces for solar panels and solar trees, generating renewable energy while also reducing the absorption of solar radiation by commercial buildings (and thus their energy-intensive cooling needs). Rooftop solar can enable smaller urban business owners to achieve energy independence and can thus contribute to an urban commercial environment that’s not just sustainable but equitable.
