National Solar Mission

Best Practices Guide

Implementation of State-Level Solar Rooftop
Photovoltaic Programs in India

Government of India
MINISTRY OF
NEW AND RENEWABLE ENERGY
June 2016
 National Solar Mission
Best Practices Guide
Implementation of State-Level Solar Rooftop
Photovoltaic Programs in India

Government of India
MINISTRY OF
NEW AND RENEWABLE ENERGY
Contents
1. Introduc on to this “Guide” .............................................................................................................. 1
1.1. Purpose of the Guide ................................................................................................................ 1
1.2. Organiza on of this Guide ........................................................................................................ 1
1.3. Customiza on, Compliance and Revisions ............................................................................... 2
2. Business Models ................................................................................................................................ 3
2.1. Introduc on ............................................................................................................................. 3
2.2. Components and Design of Solar Roo op Business Models ..................................................... 3
2.3. Types of Solar Roo op Business Models ................................................................................... 4
1. Self-Owned Business Models .............................................................................................. 4
2. Third Party-Owned Business Models .................................................................................. 7
3. U lity-Based Business Models ............................................................................................ 9
2.4. Key Challenges and Considera ons ........................................................................................ 12
3. Policy and Regula on ...................................................................................................................... 15
3.1. Purpose and Introduc on to Policy ........................................................................................ 15
3.2. Purpose and Introduc on to Regula on Regula ons to Promote Solar Roo op and
Key Considera ons ................................................................................................................ 21
4. Technical Standards and Specifica ons ........................................................................................... 25
4.1. Types of Roo op PV System ................................................................................................... 25
4.2. Capacity Limita ons ............................................................................................................... 26
4.3. Key Technical Considera ons, Standards and Specifica ons ................................................... 26
4.4. Technical Documenta on, Drawings and Inspec on .............................................................. 36
5. Administra ve Processes ................................................................................................................ 38
5.1. Significance of Administra ve Processes ................................................................................ 38
5.2. Roles and Responsibili es of Key Stakeholders ....................................................................... 38
5.3. The Interconnec on Process .................................................................................................. 41
5.4. DISCOM’s Preparatory Processes .......................................................................................... 45
1. Introduction to this “Guide”

1.1. Purpose of the Guide

The Ministry of New and Renewable Energy (MNRE), Government of India has announced an
ambitious solar target of 100,000 megawatts (MW) installed capacity by 2022, of which 40,000
MW of solar photovoltaic (PV) systems are to be installed on rooftops.

There have been several efforts at the policy, regulatory and implementation levels for solar
rooftop deployment in India. For a long time, the country witnessed solar installations with the
help of Government funding, which has now started evolving to various public-private
partnership (PPP) and private sector-based models. However, the net capacity of such projects
has till now remained limited, especially compared to the regulatory and procedural efforts
undertaken to realize such projects.

With dramatic reduction in PV prices over the last couple of years, we are entering an era of
‘grid-parity’, where the cost of solar electricity is competitive with retail electricity tariffs in many
cases. This presents a whole new opportunity for the country, the sector and the market.
However, in order to realize widespread solar rooftop deployment opportunities, the
implementation process for each stakeholder needs to be clear and simple.

As many State nodal agencies (SNAs) and distribution companies (DISCOMs) embark on their
journey of solar PV rooftop development, they will face challenges – most of these are teething
troubles – which could include lack of clarity in policy or regulation to technical uncertainty to
detailing and simplification of administrative procedures.

Implementing agencies can follow the ‘learn-as-you-go’ approach, but this approach would be
costly and time consuming, as most of the issues would already been sorted out by someone
else somewhere around the world or maybe even in India.

This Guide attempts to lay out a comprehensive and efficient solar PV rooftop implementation
support process into a single document. It captures global and national best practices and
learnings. The Guide primarily addresses grid-connected rooftop PV systems, under both net
metering and gross metering connectivity.

1.2. Organization of this Guide

The Guide is organized to provide necessary and sufficient information to almost all
stakeholders, especially administrative stakeholders including:

 State-level policy-makers and State Electricity Regulatory Commissions (SERCs).

 Implementing agency(s), usually the SNA or the local DISCOMs.
 Solar rooftop project developers, installers or even electrical inspectors.

1
 Financial institutions (FIs).
While it is recommended that all the stakeholders read the entire Guide, the Guide is designed
to be also used as a reference, where one can read specific chapters or sections related to their
role or responsibility. The chapters cover the following aspects:

Chapter 2 (Business Models) discusses the basis of the transaction structure of any solar
rooftop programme – the relationship between different stakeholders and the prevailing
business models in the space.

Chapter 3 (Policy and Regulation) is oriented towards policy-makers and regulators,

addressing key considerations from the State’s perspective towards its administration as well as
the stakeholders.

Chapter 4 (Technical Standards and Specifications) is oriented towards the implementing

agencies, primarily the DISCOMs and SNAs, as they are concerned with the safety, quality and
performance of the solar installations. Relevant technical configurations in terms of system
design and configuration; safety, performance and quality standards; documentation and
compliance requirements are discussed in this chapter.

Chapter 5 (Administrative Processes) deals with specifics of administering a solar rooftop

programme and details all critical preparatory, interconnection-related, and operation-related
processes of the DISCOM.

1.3. Customization, Compliance and Revisions

The Guide addresses all necessary concerns, whether administrative or technical, to realize a
simple, efficient and scalable solar PV rooftop programme. While it discusses many topics in
detail, readers are suggested to ensure their applicability before directly applying them. Hence,
it is envisioned that slight customization may happen from State to State based on the State’s
vision, budgets and even statutory provisions.

In case of any conflict between the provisions of the Guide with statutory provisions in the
current scenario or in the future, the statutory provisions shall overrule the provisions of the
Guide.

2
2. Business Models

2.1. Introduction

Design of appropriate business models assumes a greater significance in the case of solar PV
rooftop market due to their relatively high cost of energy generation/high upfront investments
coupled with distributed implementation and generation. Hence, appropriate design and
packaging of a solar rooftop deployment programme in terms of a viable business models is key
to its success, and should be the basis of any policy or regulation formulation.

2.2. Components and Design of Solar Rooftop Business Models

a. Building Blocks for a Solar Rooftop Business Model

The key determinants of any business model in the solar rooftop space are the ownership and
revenue structures and other incentives. In most cases, the ownership structure or the revenue
model are identified based on a number of factors such as the policy and regulatory framework
in the market, the electricity market structure and tax policies. Revenue models depend on the
manner in which the energy is generated and used/sold. This may also include other incentives
which may be needed to ensure the financial viability of the business model.

b. Evolution of Solar Rooftop Business Models

The solar rooftop business model has evolved overtime based on the ownership of systems and
external stakeholder participation as highlighted in Figure 2-1.

Figure 2-1: Evolution of Rooftop and Decentralized Solar PV Business Models (Source: IFC – Harnessing the Sun)

3
The first generation model is the most commonly found model globally. It was also the default
model for the launch and scale-up of the German and Japanese solar programmes. The
ownership of the systems under this generation lay with the rooftop owners or the end-users.

The second generation model evolved based on packaging a large number of smaller solar
rooftop projects by a single project developer, known as a ‘third party’. As this third party makes
the investments, the consumer can avoid the burden of high upfront capital cost, and still benefit
from the rooftop PV system by procuring that power and/or even leasing the rooftop system.

At present, the first two generation models dominate the market but a small shift can be seen in
the way utilities are entering this market. As the utility is already in the business of supplying
power and has been witnessing solar developers (consumers or third parties) take their share of
the market, there is a perfectly justifiable case for utilities themselves to own the rooftop PV
systems and supply the generated power.

2.3. Types of Solar Rooftop Business Models

1. Self-Owned Business Models

Self-owned business models, as the name suggests, promote investment in solar rooftop
systems by the consumers to either generate electricity for self-consumption or for export to the
grid. For most of the self-owned business models, the rooftop owner invests the equity
component of the rooftop system while the debt component is usually financed through a FI
such as a commercial bank. Self-owned business models for grid-connected solar PV rooftop
deployment have developed through the following three routes:

a. Captive (off-grid)

Figure 2-2: Captive (Off-Grid) Business Model

(i) Application: Captive (off-grid) business models are prevalent in places where the grid is
either absent or has very poor reliability. These rooftop systems have a huge application
in rural, remote, isolated and semi-urban areas which have no or limited access to
power. The consumer sets up the solar rooftop system with the intention of utilising all
the power generated by the system onsite as shown in Figure 2-2.

(ii) Advantages: Stand-alone captive rooftop systems are usually developed and deployed
in energy deficient areas. These areas either lack clean and efficient lighting sources or

4
 use alternate supply options such as diesel which are very expensive. These stand-
alone captive solar rooftop systems, coupled with appropriate storage options, provide a
more reliable and cheaper option.

(iii) Disadvantages: Stand-alone captive rooftop systems need storage options coupled with
them to service fluctuating demand requirements. The addition of storage options
increases the cost of the energy to the user. Standalone captive systems have to be
designed with a certain amount of redundancy in mind and this means that the sizing of
the system always needs to be higher than what is optimally required, which in turn
pushes up the cost of energy.

b. Gross Feed

The gross feed model consists of grid-connected solar rooftop systems which feed all the
energy generated to the grid. In lieu of the energy fed to the grid, they are paid feed-in-tariff
(FiT). The FiT is approved by the regulator, and the owner/consumer enters into a long term
power purchase agreement (PPA) with the utility. The FiT provides a minimum rate of return
on the investment to the investor as shown in Figure 2-3.

Figure 2-3: Gross Feed Business Model

(i) Application: The key markets to adopt gross FiTs for solar rooftop systems have been
Germany, Italy, France, other European Union nations, Japan and the Gandhinagar Solar
Rooftop Pilot project in India.

(ii) Advantages:
• These systems do not need to be coupled with stand-alone storage devices which
bring down the cost.
• This model allows entry of a number of new investors (consumers), resulting in the
enhancement of the investment base.
• Gross metering safeguards the utilities against migration of high paying consumers out
of the utility ecosystem and the long-term viability of the grid.
• The cost of solar is added to the Annual Revenue Requirements (ARR) of the utility
and socialised across all consumers groups.
• This model allows all consumer categories, regardless of their consumer tariffs, to
participate in the solar rooftop programme and develop optimally-sized solar rooftop
installations and earn a minimum rate of return on the investment made by them.

5
 (iii) Disadvantages: The FiT is usually higher than the average power purchase cost, and,
creates an apparent short term cash flow burden on the utility’s balance sheet. The higher
cost of procurement also leads to increases in consumer tariffs.

c. Net Metering

Under the net metered business model, solar energy is first consumed by the consumer for
meeting the internal/captive requirement and the rest (surplus) is exported to the grid, where
it is banked with the utility, and subsequently when the consumer imports power from the
grid, the banked energy is adjusted against imports from the grid, leading to a lower bill for
the consumer for grid based electricity services. It is amongst the most popular business
model followed in the United States (U.S.).

Figure 2-4: Net Metering Business Model.

(i) Application: Net metering mechanism and the associated business models become
attractive only when the consumer tariffs are higher than the cost of solar generation. In
case tariffs are lower than the cost of generation, then installations do not take place or
have to be incentivised through fiscal incentives as shown in Figure 2-4.

(ii) Revenue Stream and Benefits: There are two revenue streams in this model. The first is
the savings due to the avoided cost of power purchase from the grid, and the second is
the sale of surplus power generated (at a rate determined by the regulator) over and
above the consumer’s own consumption within a settlement period.

(iii) Advantages:
• It does not depend on FiT (which is usually higher than the average power purchase
cost for the utility), and leads to limited outflow of funds from the utility.
• It allows only those consumers to install solar rooftop who can afford to pay for solar
and discourages socialisation of higher solar tariffs, thus bringing down the impact of
high solar costs across the whole cross-section of consumers.

(iv) Disadvantages:
• The net metering concept works only for consumers with high grid tariffs. It has a
severe limitation in a market such as India where the cost of power for a large majority
of the consumers is below the cost of solar power such as domestic or institutional
consumers.

6
 • It reduces the net quantum of power sold by utilities to consumers, especially for high
tariff paying consumers.
• It leads to underutilisation of rooftop spaces as most utilities and regulators aim to
regulate the size of the systems in such a way that the generation of the system is
lower than the annual energy demand of the rooftop owner’s energy requirements.

2. Third Party-Owned Business Models

Under the third party-owned model, a third party (separate from the consumer [rooftop owner]
and the utility) is the owner of the rooftop
systems. This third party may lease the Case Study of Solar Leasing: Solar City
rooftop from the rooftop owner and then Solar City is one of the largest solar lease
generate power which may be sold to the companies operating in the U.S. Solar City provides
utility or to the rooftop owner through a residential solar leases, which are financed by FIs
PPA or the third party may lease the and equity investors who claim the income tax credit
and depreciation benefits. Solar City offers its
system to the rooftop owner who may
customers a variety of lease structures including
utilize power from the system.
zero down-payment options. The lease payments
cover the cost of the system and the cost of
Third party-owned models are emerging monitoring, maintenance, and repair, including
as a significant market force in the solar inverter replacement, if necessary. Solar City also
rooftop segment due to certain inherent guarantees a minimum level of electricity output
capabilities that they bring to the business from the rooftop PV system.
like access to low cost financing; greater
ability to take on, understand and mitigate technical risks; aggregate projects and bring in
economics of scale; effectively avail tax benefits; and the ability to make use of all Government
incentives. Third party-owned rooftop systems have been developed through the following two
main routes:

a. Solar Leasing/Leasing of Solar Systems

(i) Design: Solar leases were initially introduced in the U.S. market for financing residential
PV systems where rooftop owners leased solar PV rooftop systems from large profit
making investors. The lease agreement stipulates that the rooftop owner would make a
monthly lease payment to the lessor over a specified period of time while enjoying the
benefit of the electricity generated from the system and benefit from lower utility bills.

(ii) Ownership: The ownership of the solar rooftop systems lie with the lessor. After a fixed
period of time and at the end of the lease period, the rooftop owner has the option to (a)
purchase the PV system, (b) extend the lease agreement, or (c) remove the system from
the roof.

(iii) Revenue Streams and Benefits: The third party investor earns steady cash flows in the
form of lease rental payments while also benefiting from tax credits and depreciation
benefits available to investors of solar rooftop equipment. The tax benefits help shore up

7
 project internal rate of return (IRR) which in turn brings down the cost of leasing the
systems to home owners.

(iv) Advantages:
• The rooftop owner is not required to make an upfront investment in solar rooftop
systems but still benefits from use of these systems.
• The use of tax benefits makes these systems cheaper to the rooftop owner.

(v) Disadvantages:
• Leasing of capital equipment attracts a service tax, which makes leasing uncompetitive
over the life of the project.
• There may be no relation between the lease rental paid by the consumer to the lessor
and the quantum of energy generated from the systems, which could lead to low
quality/performing installations.

b. Solar Power Purchase

Agreements Case Study: 5 MW Gandhinagar Solar Rooftop
Programme
The third party developer invests The 5 MW Gandhinagar Solar Rooftop Programme is a
in solar rooftop asset, and the successful example of combined rooftop leased by a third-
electricity is sold either to the party with grid feed model via gross metering. This is
building owner (also the utility among the first programmes to implement solar rooftop at
consumer) or fed into the grid. a megawatt-scale in India, and that too as a PPP.
Third party development models
Here, two solar project developers, Azure Power and
have the wherewithal to
SunEdison, were selected through a tariff-based reverse
aggregate rooftops, structure bidding, and given a quota to install an aggregate of 2.5
large projects which bring MW of solar PV rooftop systems each. The two
economies of scale and also take developers signed a PPA with Torrent Power Limited, the
maximum leverage of local distribution utility of Gandhinagar. Power generated
Government incentives, driving by each solar rooftop system is fed into and accounted for
down the cost of solar power. using a dedicated feed-in meter. Rooftop lease
agreements between the project developer and the
Application and Revenue rooftop owner (private residential or government), were
designed.
Arrangements:
A number of commercial arrangements have come into the market where third party
developers sell the power to either to the rooftop owner or to the grid through a PPA. Some
of these arrangements have been highlighted below:

(i) Individual Rooftops With Third Party-Owned Systems With Grid Feed:

• Gross Metering With Third Party Ownership of Systems: Under the gross metering
arrangement, the third party developer leases a rooftop and pays a rooftop lease/rental
for the rooftop space. The developer exports the solar energy generated from the

8
 rooftop installation to the utility at a predetermined FiT set by the regulator. The key
challenge in this model lies in the availability of the rooftop for 25 years.

• Net Metering With Third Party Ownership of Systems: Under this arrangement, the
rooftop owner signs a PPA with the third party developer (who is given the rooftop for
the installation) and enters into a back to back net metering arrangement with the
utility. The rooftop owner buys electricity generated by the third party developer at a
fixed price under a long term PPA. This model is quite prevalent in the U.S.; especially
with large energy consumers like retail chains or warehouses and logistics companies.
This model has become quite successful in markets which have a high cost of
electricity and time of day (ToD) tariffs.

(ii) Combined Rooftop Leased by Third Party with Grid Feed (Gross Metering): Under this
model, a project developer identifies and leases (through a lease agreement) a
number of rooftops in an area and develops these together in the form of a single
project. The project developer invests in the equipment, sets up the project and sells
the energy generated to the utility. This model was followed for the pilot demonstration
solar rooftop project under the Gandhinagar Solar Rooftop Program, where all the
energy generated by the systems is being fed into the grid and the rooftop owners are
entitled to a generation-based lease rental.

3. Utility-Based Business Models

Utility involvement in the solar rooftop market was initially limited to being a facilitator through a
broad framework for interconnection. However, a growing number of investor-owned utilities
have recently taken up a more pro-active stance in encouraging the development of solar
rooftop projects due to 1) reduction in price of distributed clean energy technologies such as

Utility Ownership Utility Financing Customer Programs Energy Purchases

Southern California APS (special financing/ Ellensburg Municipal We Energies (Offered a

Edison (250 MW on refinancing to solar (WA): 136 kW available feed-in tariff for 10
Customer Sites) customers) with customers for net years contract)
metering
Western Massachusetts PSE&G
Electric Company (Lend capital to end- Sacramento Municipal
(6 MW on public and users & solar (CA) : 1 MW -
private high visibility developers for 40%- customers purchase
sites) 50% of project cost) share
Florida Power and Light Arizona Public Service
(110 MW on Customer (AZ): Utility owned,
Sites) customer sited, host
customers receive fixed
price contract, 2 MW

Figure 2-5: Utility-Based Business Model

solar PV; 2) advent of a number of investors and developers who can implement systems which
partially or wholly replace the grid; 3) maturing technology and easy financing options that allow

9
consumers to partially switch to these technologies; and 4) proactive policy and regulatory
frameworks that allow these decentralised distributed technologies to come into play in the
market.

Keeping in mind the impact of Case Study of Net Metering: SunEdison

disruptive technologies such solar PV
A well-known example for net metering on individual
rooftop, the utilities have also started
rooftops with third party-owned systems with grid feed is
working towards active participation in the SunEdison LLC’s agreement to supply power to
these emerging segments through the Walmart Stores using the latter’s rooftops at several
use of new and innovative utility-based locations. These PPAs were sold to investors who then
solar PV rooftop business models became the owners of the installation and could claim
which aim to capture value of in these tax credits and rebates on the investments.
markets. The utilities involvement in the
solar PV rooftop business model space has been limited to four broad areas which have been
highlighted in Figure 2-5 with relevant examples.

a. Utility Ownership

Utilities are becoming more and more Case Study of Utility Financing: Powder River
aggressive in owning rooftop systems Energy Corporation
as it allows them to claim tax credits, On bill financing was offered by Powder River Energy
earn a healthy rate of return on the Corporation, Wyoming to its residential customers - they
power generated from these could take loans up to USD 2,500 at a 0 percent rate of
installations while also ensuring that interest for up to 36 months. The Public Service Electric
consumers with rooftops do not transit and Gas Company (PSE&G) of New Jersey also offers
out of the utility’s ecosystem. utility-based loans at 6.5 percent for up to 10 years and
covers around 40 to 60 percent of the system cost.
A number of utilities ranging from San
Diego Gas and Electric (SDG&E), Southern California Edison to Western Massachusetts
Electric Company are aggressively developing rooftop installations on customer sites. The
overriding reason behind the success of this model is the regulated rate of return that is
available for these utilities for the capital investment in rooftop installations.

b. Utility Financing

Another route in which utilities are encouraging the deployment of solar rooftop installations is
by financing consumers. Utility and public financing programs have been launched by a number
of utilities and local Governments across the U.S. to facilitate adoption of solar PV with two
broad aims: (a) covering rooftop owners who do not have access to traditional financing options
(self/third party), and (b) enhancing affordability of systems by reducing interest rates and
upfront fees and relaxing lending guidelines. Two types of loans are typically available through
utility-based financing:

10
(i) Utility Loans: These are loans which are targeted at utility customers and administered by
the utility at the local, municipal or the State level. These programmes are structured so as
to be either cash-flow positive or neutral, in order to make electricity savings equal to or
greater than the cost of the loan. Utility loans are either linked to the consumer (bill
financing) or linked to the property (meter secured financing).

(ii) Revolving Loans: Revolving loans finance rooftop owners directly through public sources
such as public benefit funds, environmental non-compliance penalties, bond sales or tax
revenues. Rooftop owners prefer these as they come at low interest rates, and have relaxed
lending guidelines and extended tenors. The Montana Alternative Energy Revolving Loan
Program is one such example.

c. Community-Shared or Customer Programmes

Community-shared solar programmes provide energy consumers the option of utilizing the
benefits of solar generation (through proportional benefits via virtual net metering) without
actually installing on-site solar PV or making high upfront payments required for such projects.

Examples of Community-Shared 2. Colorado Springs Utility’s Community

Programmes Offered in the U.S. Solar Gardens Program: In 2010, the
1. Tucson Electric Power’s (TEP) Bright Colorado Spring Utility offered its
Tucson Community Solar Program: TEP, an customers the chance to invest in
investor-owned utility operating in Arizona, community solar gardens. Under this
U.S., launched a third party-developed scheme, the customers could lease panels
community-based solar programme for from one of two community solar project
developing 1.6 MW of new solar capacity in developers, Sunshare or Clean Energy
three years. This programme allowed Collective, with a minimum solar garden
consumers to buy generating blocks of 150 interest of 0.4 kW. All customers who
kWh per month for a monthly fixed fee of USD subscribed to the programme received a
3 per month. The investments for the solar fixed credit of USD 0.09/kWh on their
installations were made by a third party electric bill for their share of the power
developer. generated by the panels they had leased.
The pilot run by the programme was for 2
These plants are usually set up by community- MW of installations.
owned utilities or third parties in partnership with
investor-owned utilities. Case Study of Customer-Sited PV: San
Diego Gas and Electric
The community-shared programme allows utilities SDG&E encourages development of solar
to develop larger programmes and projects while rooftop installations owned by it and
installed on leased rooftops of customers.
providing expanded options to more customers at
The rooftops are leased by SDG&E,
lower costs. The broad outline of a community-
generally for 10 years, with a possibility of
shared solar project model is highlighted in Figure two five-year extensions. The rooftop
2-6. systems are connected using a gross
metering format.
The community members who sign up for these

11
projects receive solar benefits without paying upfront capital cost, installation cost or worry
about the O&M.
Community Owned
3rd Party Developer
Utility

Investment Returns

Community Owned Utility Installation

Virtual Net Metering – solar Monthly lease rental or fixed
energy credits at fixed costs Cost of solar power

Community
Residential Educational Commercial Industrial
Service
Consumer Consumer Consumer Consumer
Consumer

Figure 2-6: Community-Shared Utility-Based Business Model

d. Energy Purchases

A number of utilities are also entering the market with the objective of procuring energy directly
from third party or rooftop owners by offering FiTs which allow utilities to buy all the energy
generated by the rooftop at a flat price under a long term PPA, the cost of which is passed onto
the consumers as part of its ARR, while at the same time retaining the customers on whose
rooftops these systems have been set up.

2.4. Key Challenges and Considerations

Two Examples of Energy Purchase by Utilities

While the Indian solar PV rooftop market 1. We Energies Feed-In Rate: We Energies, a
provides a number of opportunities for a utility serving in Wisconsin and Michigan’s Upper
Peninsula, offers a FiT similar to the solar FiTs
host of developers/investors, the design and
offered by European markets like Germany. The
implementation of business models in India
FiT offered by the utility is USD 0.225/kWh for 100
still remains a challenge, especially for third percent of the solar power generated, with the
party developers who want to bring in customer getting a credit on its bill or a check.
greater scale and efficiency into the rooftop
development market. 2. Gainesville Regional Utilities’ (GRU) FIT:
GRU, a municipal Utility in Florida, offers a FiT as
Solar rooftop projects suffer from a number an alternative to the rebate programme which
of commercial, policy and regulatory, allows it to retain utility customers, spread rebates
technical and financing challenges which over longer periods, and have a performance-
based contract.
need to be addressed as the market grows
through a concerted effort from policy
makers, regulators, financers and above all
the utilities. Some of these challenges have been highlighted below:

a. Contract Sanctity: For long-term sustainability and investor confidence in the market, the
contracts need to be easily enforceable, provide remedies for payment defaults, and buy out
clauses/appropriate compensation framework in case of building redevelopment or
relocation of projects.

12
b. Availability of Financing and Capacity of FIs to Evaluate Rooftop Projects: Banks and FIs
are still in the process of putting in place consumer financing products (loans) and
guidelines which allow access to debt for rooftop owners. In case of third party developers,
especially in the commercial and industrial space, banks and FIs still lack appropriate tools
and expertise to evaluate these projects especially from a long-term risk perspective. As
new business models come into the market, banks and FIs will also have to increase their
capacity to analyse and finance these models.

c. Solar Equipment Leasing: One of the key fiscal incentives used to bring down the cost of
solar in markets like the U.S. is depreciation or accelerated depreciation (AD) in the case of
India. This benefit is not available to new special purpose vehicles (SPVs), but can be
utilised through investors who can buy the equipment and then the same equipment to
developers. The key challenge here is that service tax is levied on the leased equipment
which erodes most of the benefits that investors may have attained from AD.

d. Rooftop Leasing: Access to rooftops for the life of the solar rooftop project remains another
key challenge due to issues such as reconstruction of the building or expiry of the lease of
tenets. Most private sector companies lease buildings (along with rooftops) for up to 10
years. Developing rooftop projects on buildings with leases up to 10 year becomes risky in
case the next tenet or the building owner does not agree to extend either the lease or the
PPA. Risk to rooftop projects also comes in when rooftop owners might want to construct
more floors or reconstruct the whole building before the lease/PPA runs its natural life.
Cases like these have come to light in New Delhi where institutions are not ready for solar
rooftop despite a very competitive tariff and adequate space.

e. Role of Utilities – Challenges and Facilitation Required: One of the biggest challenges faced
by the solar rooftop sector is the limited capacity of the utilities in implementing solar PV
rooftop projects. Interconnection processes are slowly being specified, and in some cases
are long and cumbersome often allowing only a few contractors/developers to participate.
There is a need to streamline the interconnection process, making it time bound and
transparent with a focus on achieving the required performance standards and quality
standards. One example is of the Bangalore Electric Supply Company Limited (BESCOM),
which, using an open sourcing framework, specified the need to only adhere to national and
international standards while deploying systems and interconnecting them to the grid.

f. Match between Incentive Mechanisms and Needs of the Market: The policy makers and
regulators have chosen the net metering framework for promoting solar PV rooftop
development in India. While this framework has a number of advantages, it also suffers from
the basic challenge of not allowing all consumer categories to develop solar rooftop projects.
There is a need to evaluate a regulatory framework which targets rooftop utilization and
penetration of solar rooftop systems on a large number of consumers such as schools,
hospitals, and storage facilities, etc. which have huge rooftop space but do not have the
financial justification for adopting net metered solar rooftop business models.

13
In conclusion, this chapter describes various business models that can be implemented
to boost and sustain the solar rooftop market. Several challenges related to these
business models are also discussed. These challenges can be overcome with robust
policy, regulatory and technical frameworks which are addressed in subsequent
chapters of this Guide.

14
3. Policy and Regulation

3.1. Purpose and Introduction to Policy

The purpose of a policy is to make the intention of the Government known to the public and
establish a framework of guiding rules for any given economic activity. Policy serves two key
purposes:

1. Give clarity to various departments within the Government on the action plan and direction
of the Government.
2. Give clarity to the general public, investors, developers and other public and private
stakeholders on the intention of the Government in a particular field.

Framing a good policy is essential for any sector that is still dependent on Government
subsidies and frameworks in order to become economically viable. A solar rooftop policy should
ideally consider and address the following clauses:

a. Vision of the Government

The vision of the Government indicates the goals and aspirations of the Government for its
people. A vision also helps align various departments within the Government and between
the Centre and the State Government during times of differences.

b. Objectives/Goals/Targets

All goals should be measurable and time bound. Setting concrete goals helps the
Government measure progress; and take corrective action in case the various departments
are not on course to meet the targets. Goals are typically measured in GW or MW over a
definite period of time.

The targets should be in line with the solar rooftop targets announced by the MNRE through
its Notification No. 03/13/2015-16/GCRT dated June 30, 2015. The targets specified by the
MNRE may be escalated slowly over time, reflecting three important facts:

o Falling Costs of PV: As PV prices fall over the target period, affordability of these
systems increases, thereby increasing the uptake of these systems.
o Increasing Power Tariffs: Most consumers opt for solar PV rooftop systems as an
effective way to hedge escalating power prices. As power prices increase steadily over
time, many more consumers will begin to augment their current grid consumption with
solar PV rooftop.
o Maturity in Ecosystems: As time progresses and various stakeholders in the solar PV
rooftop value chain begin to get familiar with the technology and its risks, the ease of
transactions and marginal risk costs begin to decrease. A good example of this is in the
banking ecosystem. As banks familiarize themselves with lending to solar PV rooftop

15
 systems from home and business owners, the costs of financing and timelines will
reduce.

Another key determinant in setting goals for solar rooftop installation in the policy is the
amount of subsidy available. Currently, there is a 30 percent capital subsidy from the MNRE
for solar rooftop systems on homes, educational institutions, hospitals, etc. States might
choose to provide an additional subsidy if required, especially for marginal groups and
economically weaker sections of society. In such cases, the availability of funds earmarked
in the State budget should be in line with the target for each year. This will ensure that the
entire planned goals are met without compromising the subsidy.

It is however important to note that subsidies must be reduced gradually over time and this
fact must be explicitly stated in the policy. The risk to State and Central Governments is that
people may get used to the subsidy and demand entitlements.

c. Operative Period

The operative period is the tenure of the policy. Most policies are extant for a period of three
to five years. The following considerations must be kept in mind while determining the
tenure of the policy:

o Changing Governments, and subsequent drastic changes in policy, are not good for the
business environment as a whole. Governments must ensure that electoral transitions
coincide with defined end-dates to policies.
o Drastically falling prices of solar PV have ensured that most of the earlier plans and
policy direction have turned void. This has necessitated a revision in the policy and
corresponding schemes under the policy. Such revisions take time since various
departments and stakeholders within the Government have to be consulted. They also
generally result in a dip in installation and can derail the roadmap to the target. It is,
therefore, suggested to have policy tenures that are short enough to quickly adapt to the
fast changing market.
o Policy tenure should be in line with the Government’s national solar goal of 40 GW by
2022. In such a scenario, it might not be prudent for the State Government to set a
policy end date as 2021.

d. Nodal Agency

A nodal agency is the Government department that is responsible for the promotion of the
policy. Clear demarcation of responsibility and a single point of contact for potential
investors/consumers go a long way in improving the overall investment climate of the State.

Most States strive to adopt a single window clearance that helps investors obtain all
clearances at a single office. This must be implemented in true spirit and a dedicated team

16
 may be constituted for the rapid approvals and addressing of investor’s grievances. The
State energy development agency/authority is best suited for such a role.

e. Implementing Agency

While the nodal agency will be responsible for promotion of the policy and passing on
benefits (e.g., subsidies) to stakeholders, it is the implementing agency that is responsible
for implementing the solar rooftop programme.

As grid-connected solar rooftop plants have an implication on utility billing, grid safety and
power quality, the DISCOM becomes the de facto implementing agency. While on the other
hand, the SNA can become the implementing agency for stand-alone solar projects.

f. Eligible Entities

Eligible entities are usually the different categories of electricity consumers mentioned in the
SERC orders. State Governments may decide to allow all the applicable schemes in the
policy to all types of consumers or may choose to limit the schemes to certain consumers
due to the financial implication on the State or one of its DISCOMs. A good example of this
is incentives such as banking or net metering schemes. Such incentives may be restricted or
reduced to commercial and industrial consumers while placing no restrictions for residential
consumers.

It is recommended that such restrictions may not be placed during the initial phases of the
policy. This is important to project that the Government is promoting solar PV rooftop.
Financial implications may be considered while setting the targets of the policy. In case, the
Government has financial constraints, then the target may correspondingly be reduced to a
number that is comfortable to various stakeholders.

Another important aspect to this clause is the definition of ‘eligible entity.’ Various business
models are in vogue due to the evolving solar PV rooftop financing ecosystem. An eligible
entity may be an owner of the building, a tenant or even a third party investor.

g. Schemes/Applicable Business Models

A solar rooftop policy is implemented through various schemes. Schemes provide the
necessary implementing framework for the policy and may change from time to time within
the tenure of the policy. They may also include specific subsidies and incentives that are
also time-bound, and may be applicable to a certain eligible entities and types of systems
(e.g., off-grid versus on-grid).

Business models are critical from an investor/company’s point of view in order to ensure
return on their business. Revenue for these investors can come in different forms; for
example, through a PPA with the rooftop owner/DISCOM/open access consumer or through

17
direct sale of equipment and engineering services (e.g., an engineering, procurement and
construction (EPC) company). A good policy should take into account all these factors and
promote various possibilities where investors may get involved. This will result in a vibrant
and dynamic market.

The State shall encourage both net metering and gross metering systems. Net metering
systems are primarily aimed at providing an opportunity to consumers to offset their
electricity bills. Gross metering systems are aimed at third party investors who will like to sell
energy to the DISCOMs by using roofs owned by another party.

Various incentives and exemptions applicable to a solar PV rooftop programme are

summarized in Table 3-1.

18
 Table 3-1: Reference Incentives and Exemptions Applicable to a Solar PV Rooftop Policy

Type of Incentive/ Sale to Distribution Licensee Sale to Third Party

Exemption/ Parameter Net Metering Gross Metering Open Access
PV System Capacity Limited to consumer’s Limited by the available Based on mutual
contract rooftop area (or related agreement between
demand/sanctioned load. to associated developer and off-
distribution transformer taker.
capacity) or as per the
relevant terms of RFP,
if applicable.
Ownership Self-owned. Self-owned or third- Third-party owned.
party owned.
Demand Cut 50 percent of the Not applicable 50 percent of the
consumer’s current billing consumer’s current
demand. billing demand.
Billing Cycle As per consumer’s current Monthly Solar energy to be
billing cycle. adjusted on a 15
minute-basis.
Banking Excess energy allowed to Not applicable as No banking allowed for
be banked during a complete energy is sold third party sale of
financial year, at the end to the distribution power. Any excess,
of which excess licensee at the tariff unadjusted energy
generation will be paid at determined by shall be purchased by
an appropriate tariff concerned SERC. the distribution licensee
determined by concerned at the tariff determined
SERC. by concerned SERC.
Tariff As determined by SERC As determined by Mutually agreed
from time to time. SERC from time to time between developer and
or based on consumer.
competitive bidding
using SERC’s tariff as
benchmark.
(Continued on next page …)

19
 (Continued from previous page)
Type of Incentive/ Sale to Distribution Licensee Sale to Third Party
Exemption/ Parameter Net Metering Gross Metering Open Access
Wheeling Charges Not applicable Not applicable As per concerned
SERC order
Transmission Charges Not applicable Not applicable As per concerned
SERC order
Wheeling Losses Not applicable Not applicable As per concerned
SERC order
Transmission Losses Not applicable Not applicable As per concerned
SERC order
Cross Subsidy Not applicable Not applicable Exempted as a
Surcharge (CSS) promotional measure
Electricity Duty Not applicable Exempted Exempted
Renewable Energy Consumer can claim Developer can claim Developer can claim
Certificate (REC) REC for solar energy REC if selling power to REC based on the
consumed by self and Distribution Licensee at provisions of relevant
energy sold to APPC. (In addition, the REC regulations.
distribution licensee at developer shall abide
Average Power by all other provision as
Procurement Cost per the relevant REC
(APPC). (In addition, regulations.)
the developer shall
abide by all other
provision as per the
relevant REC
regulations.)
Renewable Purchase Distribution licensee Distribution Licensee Distribution Licensee
Obligation (RPO) can claim RPO if (i) can claim RPO if no can claim RPO if (i)
consumed solar energy REC is claimed for the consumed solar energy
is not credited towards generated solar energy. is not credited towards
the consumer’s RPO the consumer’s RPO
and (ii) no REC is and (ii) no REC is
claimed for the claimed for the
generated solar energy. generated solar
energy.
Clean Development CDM is retained by the CDM is retained by the CDM sharing is left to
Mechanism (CDM) consumer. developer. the developer and off
taker.

20
h. Procedures

Procedures and processes are not mandatory in a solar rooftop policy; however, if
incorporated, they provide clarity to both companies/investors and to the Government
departments themselves.

It is important that the procedures are framed by respective DISCOMs and publicized upon
notification of the policy. Model procedures are indicated in Chapter 5 of the Guide.

i. Technical Requirements

Technical requirements such as metering and issues concerning grid integration are
covered by the Central Electricity Authority (CEA) standards. There are three specific
regulations that are applicable to solar PV rooftop systems:

o The CEA “Technical Standards for Connectivity of the Distributed Generation

Resources” Standards 2013
o The CEA “Measures Relating to Safety and Electricity Supply” Standards 2010
o The CEA “Installation and Operation of Meters” 2010

3.2. Purpose and Introduction to Regulation Regulations to Promote Solar Rooftop and
Key Considerations

The role of solar PV rooftop regulation is mainly three fold:

1. Determine benchmark capital costs and tariff for solar rooftop grid-connected systems.
2. Specify the grid code; ensure standards with respect to power quality and other electrical
parameters that ensure that the functioning of the grid is not compromised.
3. Ensure the proper interpretation of the Electricity Act, 2003 and resolve any disputes
between power producers, DISCOMs and consumers.

Regulations for solar rooftop systems are only applicable in case of grid-connected systems.
The regulations may be either net/gross metering. The Electricity Act, 2003 provides the legal
framework for setting up both the Central and the SERCs in the country.

The Central and State regulators are guided by the National Tariff Plan, National Electricity
Policy and Tariff Policy (Section 79, 86). In case of any conflicts between the policy and the
regulations, the Electricity Act, 2003 (Section 107 and 108) clearly states that the decision of the
Central/State Government shall be final.

Any net/gross metering regulation should ideally consider the following clauses:

21
a. Title, Scope and Application

The regulation should clearly indicate the eligible consumer to whom and under what
instances do the regulations apply. This clause is important to enable third party sale of
power via solar rooftop systems. This term is also used in the State/Central solar rooftop
policy. The key difference here is that the regulator assesses eligibility on a technical basis
such as grid voltages, grid availability, etc. whereas the State/Central Government assesses
eligibility on other financial and social criteria as well.

b. Applicable Models

All models for grid connectivity such as net metering, gross metering and other models such
as Renewable Energy Certificate (REC) and ownership models can be addressed here.
Although, there is significant overlap with the solar rooftop policy, it is good for the SERC
and the State Government to be in line with each other on this topic.

c. Capacity Limits and Interconnection Voltages

Capacity limits specify the system size in kW (or MW) that can be connected to the grid at
appropriate voltages. These are typically in line with the State grid/supply code. Example of
capacity limits for different voltage sources are indicated in Section 4.1(c) of the Guide.

d. Procedure and Process

Regulations do not need to contain a detailed process flow pertaining to application and
approval process. This is typically in the purview of the implementing DISCOM, and the
same should be duly indicated in the regulation. In addition, the regulation can also specify
time limits for specific steps of the process to ensure timely and efficient implementation by
DISCOMs and avoid grievances from consumers. Procedures are discussed in detail in
Chapter 5 of the Guide.

e. Grid Connectivity, Standards and Safety

The regulation must refer to the CEA “Technical Standards for Connectivity of the
Distributed Generation Resources” Standards 2013 and the CEA “Measures Relating to
Safety and Electricity Supply” Standards 2010. Safe solar PV penetration levels must be
mentioned on a distribution transformer-basis.

f. Metering

The regulations must point to the CEA “Installation and Operation of Meters” 2010. The
metering arrangement and jurisdiction (who shall procure and own the meter, etc.) must be
clearly laid out in the regulations.

22
 The type of meter should be specified (bi-directional meter, accuracy class, etc.) and the
cost of the meter should be apportioned to the relevant stakeholder (consumer or DISCOM).
The responsibility for charges for installation and testing of the meter should be also clearly
apportioned.

The regulation may also specify different accuracy class of meters depending on the type of
consumer (residential, commercial and industrial). The ToD-based meters are also usually
specified for industrial consumers. It is recommended to maintain the same accuracy class
of the gross/net meter as the consumer’s earlier conventional meter.

g. Energy Accounting, Billing and Banking

Energy accounting, billing and banking that are essential for settlement of excess energy
need to be considered. These include:
o Differentiation between residential, industrial, commercial and other types of consumers
(if needed).
o Differentiation between open access consumers, captive, self-owned systems and third
party-owned systems (if needed).
o What is the settlement period (one month/billing cycle/one year/15 minute)?
o What is the financial incentive in case the consumer is net positive in export of energy
generated by the solar system in the specified settlement period?
o What are the charges for banking excess energy on the grid?
o What are the withdrawal charges (in INR/kWh) during peak load times?
o Applicability of open access charges (if needed) for third party-owned rooftop systems.

It must be noted that this section has potential overlap with specification of different
business models and the charges under the policy. It is recommended that the policy and
regulation are harmonized and that the policy includes all provisions mentioned in the
regulations.

h. Renewable Purchase Obligation (RPO), REC and other Green Attributes

One of the main drivers of any solar programmes, whether on rooftop or on the ground, is
the RPO. In addition to the (i) DISCOM, this RPO is also applicable to (ii) consumers with
large captive power plants, usually greater than 1 MW, and (iii) open access consumers with
large contract demands, usually greater than 1 MW. These ‘obligated entities’ are defined by
the SERC from time to time.

Solar PV rooftop plants directly cater to the RPO. However, many consumers may not be
obligated entities, and in this case, the DISCOMs may be encouraged by accounting all the
generated solar energy towards the DISCOM’s RPO. This concept is also indicated in the
earlier policy-related sections of this chapter.

23
 Green attributes include International Carbon Credits and India’s National REC Mechanism.
The applicability, and more importantly, the ownership of these attributes need to be
addressed in a transparent manner. There can be a potential overlap in the jurisdiction of
this clause with the State/Central Government policy in which case, the policy holds
precedence. It is, therefore, recommended that the Government and the regulator converge
to a similar stance on this matter.

i. Powers to Direct/Relax/Amend

This clause ensures that the provisions mentioned in the regulations may from time to time
be reviewed and modified as it deems fit to the Commission.

Thus, various key policy and regulatory considerations are discussed in this
chapter. These policies and regulations have to be based on the business models that
were discussed in Chapter 2, which becomes critical to the success of the solar rooftop
programme. It is also important that the policy and regulation supplement each other,
and bring out sufficient clarity to the DISCOMs and other stakeholders for implementing
the programme.

24
4. Technical Standards and Specifications

4.1. Types of Rooftop PV System

Rooftop PV systems are classified based on the following parameters:

a. Connectivity to the Grid:

(i) Stand-alone PV systems are isolated from the distribution grid, and usually use stand-
alone inverters with batteries.
(ii) Grid-connected PV systems (also known as grid-tied systems) are directly connected to
the distribution grid, use grid-connected inverters, and usually do not use batteries. Such
systems are capable of exporting surplus power into the distribution grid and are designed
to automatically shut down if it detects anomalies in grid parameters such as voltage,
frequency, etc.
(iii) Hybrid PV systems are connected to the grid and also have a battery backup. If a hybrid
PV system observes anomalies in grid parameters, they are designed to work in an
isolated mode.
(iv) Other grid-interactive PV systems are also evolving in India wherein PV systems are
directly connected with uninterruptible power supply systems. Such systems operate
irrespective of grid conditions, but are usually not capable of feeding energy back into the
grid.

b. Metering Arrangement:

The various metering arrangements are shown in Figure 4-1.

(i) Net metering wherein a single meter records both import of conventional energy from
distribution grid and export of solar energy into distribution grid. Grid-connected, hybrid
and other grid-interactive PV systems can be net metered.
(ii) Gross metering (also known as feed-in metering) wherein all the energy from the system
is exported to the grid and is separately recorded through a different ‘feed-in meter.’ Only
grid-connected PV systems can be gross-metered.

c. Interconnection Voltage: (i.e., voltage level at which the PV system is connected to the
grid) - primarily governed by the regulation of the respective State. In case of direct
interconnection with the grid, the following interconnection voltages are applicable:

(i) For capacity less than 4 kW (or 5/6/7/10 kW in some States) - connected to the
distribution grid at 240 VAC, 1φ, 50 Hz.
(ii) For capacity more than 4 kW (or 5/6/7/10 kW in some States) but less than 50 kW
(or 75/100/112 kW in some States) - connected at 415 VAC, 3φ, 50 Hz.
(iii) For capacity more than 50 kW (or 75/100/112 kW in some States) but less than 1
MW (or 2/3/ 4/5 MW in some States) - connected at 11 kVAC, 3φ, 50 Hz.

25
 IMPORTANT: It should be noted that the same voltage ranges might not be applicable to
net metering schemes as it is possible that PV plants with larger capacities can be
interconnected at points at relatively lower voltages within the consumer’s premises.
Unnecessary stepping up of voltage and then stepping it down for utilization by the
consumer can increase both cost and inefficiency.

4.2. Capacity Limitations

A solar PV rooftop system’s capacity is typically limited by one or more of the following factors:

a. Technical Reasons:

(i) Limited requirement of energy or the lack of shadow-free rooftop area.

(ii) Non-availability of distribution transformer capacity for evacuation (this can be
enhanced through regulatory and/or DISCOM’s intervention).
(iii) Lack of a higher interconnection voltage (this can be enhanced through regulatory
and/or DISCOM’s intervention).

b. Limitations Under Regulatory Provisions:

(i) Capacity of the PV system limited to connected or sanctioned load of consumer.

(ii) No substantial financial incentive/credit provided to consumer for surplus generation
of energy at the end of the billing cycle or settlement period.
(iii) Capacity of the PV system designed to meet a particular RPO or SPO.

4.3. Key Technical Considerations, Standards and Specifications

This section discusses key technical considerations from an administrative stakeholder’s

perspective, especially for the DISCOM, in terms of safety, quality and performance. DISCOMs
should ensure compliance of these factors for PV systems connecting to the distribution grid
through appropriate standards and specifications indicated here.

CEA’s (Technical Standards for Connectivity of the Distributed Generation Resources)

Regulations, 2013 primarily govern the standards and guidelines for rooftop PV systems in
India. These regulations refer to relevant IS issued by the Bureau of Indian Standards (BIS).
Further, in case of absence of relevant IS, equivalent international standard should be followed
in the following order: (a) International Electro-technical Commission (IEC), (b) British Standard
(BS), (c) American National Standard Institute (ANSI), or (d) any other equivalent international
standard. In addition, the regulations state that industry best practices for installation, operation
and maintenance should also be followed along with the relevant standards.

 IEC 60364, 1st Ed. (2002-05), “Electrical installations of buildings – Part 7-712:
Requirements for special installations or locations – PV power supply systems,” is the

26
 Legend
: DC Power
: AC Power
: Direction of Power Flow
C : Consumption Meter
G : Gross/ Generation Meter
N : (Bidirectional) Net Meter

PV Array Grid-connected Inverter PV Array Grid-connected Inverter PV Array Battery

G (DC)
G G
Hybrid
C N Inverter N
To Grid To Grid To Grid

(b) (c) (d)

Figure 4-1: Metering Arrangement: (a) Conventional Metering, (b) Gross Metering or Feed-In Metering, (c) Net
Metering, and (d) Net Metering Hybrid System

primary standard for PV installations, safety and fault protection, common rules regarding
wiring, isolation, earthing, etc. This standard is applicable and commonly followed in India.

a. Electrical Safety
Table 4-1: Trip Time in Response to Abnormal
(i) General: All PV systems should comply Voltages as per IEC 61727

with the CEA’s (Measures Relating to Grid Voltage (at Maximum Trip
Safety and Electricity Supply) Interconnection) Time
Regulations, 2010.
V < 50% of VNominal : 0.1 seconds
(ii) Anti-Islanding: All grid-connected and 50% < V < 85% : 2.0 seconds
hybrid PV inverters are designed to shut- 85% < V < 110% : Continuous
down when the grid parameters like
110% < V < 135% : 2.0 seconds
voltage, frequency, rate of change of
frequency, etc. change beyond the 135< V : 0.05 seconds
predefined range of the inverter. ([Note: VNominal for India is 240 V (1φ) or 415 (3φ) V at LT.)

 IEC 61727, 2nd Ed. (2004), “Photovoltaic (PV) systems – Characteristics of the utility
interface,” is a standard for PV systems rated for 10 kVA or less. Section 5.2.1 indicates
maximum trip time in response to grid voltage variation as given in Table 4-1. Section 5.2.2
specifies that the system should cease to energize the grid within 0.2 seconds if the grid
frequency deviates beyond +1 Hz of nominal frequency.

 CEA’s (Technical Standards for Connectivity of the Distributed Generation Resources)

Regulations, 2013, in its Section 11 (6) stipulates similar response times for disconnection of
the distributed generation system. However, IEC 61727, being more stringent as well as
widespread, is acceptable and more convenient to follow in India.

27
 IEC 62116, 2nd Ed. (2014-02), What Is ‘Anti-Islanding?’
“Utility-interconnected
photovoltaic inverters – Test One of the foremost concerns among DISCOMs (and even
procedure for islanding transmission companies) engineers, when connecting a PV
prevention measures,” provides system to the grid is ‘What if the distribution grid shuts
a test procedure to evaluate the down but the PV system remains ‘on’ and keeps on
injecting power into the grid? Could this be a hazard to
performance of islanding
the technician who is unaware of this live PV system
prevention measures for
and comes in direct physical contact with the grid?’
inverters that are connected to
the utility grid. Inverters Another common question is ‘If two PV systems are
complying with this standard, for feeding solar power into the grid and if the grid shuts
capacities both less than and down, can the two inverters create a reference for each
greater than 10 kVA, are other and remain on?’
considered non-islanding as
defined in IEC 61727. The answer to both these questions is ‘NO.’ The good
news is that this problem has been sorted out a long time
ago and is successfully being practiced around the world.
(iii) Earthing (or Grounding):
While earthing practices in
All grid-connected PV inverters are designed to shut
India are common and down when grid parameter change beyond the
guided by IS: 3043-1987 predefined range programmed in the inverter (including
(Reaffirmed 2006), but as a grid shut-down); thus, avoiding the PV system to act as
PV system contains both AC an energized ‘island.’ This feature is called anti-
and DC equipment, earthing islanding.
practices are often not
obvious for such systems. Anti-islanding is ensured through various IEEE, IEC, UL,
Hence, clarification regarding DIN VDE, etc. standards for such grid-connected inverters.
earthing practices become
critical from System Designer’s as well as the Electrical Inspector’s perspective.

 IS 3043-1987 (Reaffirmed 2006), “Code of practice for earthing,” governs the earthing
practices of a PV system.

Earthing is required for PV module frames, array structures, (power, communication and
protective) equipment and enclosures, AC conductors and lightning conductors. Although DC
and AC systems are considered separate, they should be connected together during earthing.
Earthing of DC cable is not required in most cases.

 IEC 62109-1, 1st Ed. (2010-04), “Safety of power converters for use in photovoltaic power
systems – Part 1: General requirements,” defines the minimum requirements for the design
and manufacture of Power Conversion Equipment (PCE) for protection against electric
shock, energy, fire, mechanical and other hazards.

 IEC 62109-2, 1st Ed. (2011-06), “Safety of power converters for use in photovoltaic power
systems – Part 2: Particular requirements for inverters,” defines the particular safety

28
requirements relevant to DC to AC inverter products as well as products that have or
perform inverter functions in addition to other functions, where the inverter is intended for
use in PV power systems.

When earthing PV modules, all frames should be connected to one continuous earthing
cable. Many installers use small pieces jumper cables to connect frames of consecutive
modules, which is a wrong practice. Further, star-type washers should be used when bolting
the lugs of earthing cable with the module frame that can scratch the anodization of the
module frame to make contact with its aluminium.

The earthing conductor should be rated for 1.56 times the maximum short circuit current of
the PV array. The factor 1.56 considers 25 percent as a safety factor and 25 percent as
albedo factor to protect from any unaccounted external reflection onto the PV modules
increasing its current.

In any case, the cross-section area or the earthing conductor for PV equipment should not
be less than 6 mm2 if copper, 10 mm2 if aluminium or 70 mm2 if hot-dipped galvanized iron.
For the earthing of lightning arrestor, cross-section of the earthing conductor should not be
less than 16 mm2 of copper or 70 mm2 if hot-dipped galvanized iron.

Resistance between any point of the PV system and earth should not be greater than 5 Ω at
any time. All earthing paths should be created using two parallel earth pits to protect the PV
system against failure of one earth pit.

(iv) DC Overcurrent Protection: The PV system is protected from overcurrent from the
PV modules with the help of fuses at the string junction box. As PV modules are
connected in series in a string, the short-circuit current of the string is equal to the
short circuit current of the PV module. Each string should have two fuses, one
connected to the positive and the other to the negative terminal of the string. The
fuse should be rated at 156 percent of short-circuit current and 1,000 VDC; if the
exact current rating is not available, the nearest available higher rating should be
used.

(v) DC Surge Protection: Several makes for DC surge arresters or SPD are available
specifically for PV applications. The surge arrestors should be of Type 2 (with
reference to Standard IEC 61643-1, “Low Voltage Surge Protective Devices”), rated
at a continuous operating voltage of at least 125 percent of the open-circuit voltage
of the PV string, and a flash current of more than 5 A. As the string inverters used for
rooftop PV systems do not allow more than 800 VDC, surge arrestors rated for 1,000
VDC are commonly used. The surge arrestors should be connected to both positive
and negative outgoing terminal of the string junction box (if the inverter already does
not have an equivalent in-build DC surge arrestor).

29
 (vi) Lightning Protection: Lightning protection installations should follow IS 2309-1989
(Reaffirmed 2010).

 IS 2309-1989 (Reaffirmed 2010), “Code of practice for the protection of buildings and allied
structures against lightning” govern all lightning protection-related practices of a PV system.

Large PV systems should have a dedicated lightning protection system including lightning rods,
conductor and dedicated earth pits. For this, the existing lightning protection of a building may
be used, provided it adequately protects the installation area and is assured of functioning
throughout the life of the PV system.

(vii) Ingress Protection: All PV equipment, if installed outdoors, should have an ingress
protection rating of at least IP65. This strictly applies to all junction boxes, inverters
and connectors. Although many inverters are rated for operation up to a maximum
ambient temperature of 60°C, it is highly recommended to make an additional
shading arrangement to avoid exposure to direct sunlight and rain.

(viii) Labelling of PV System Equipment: Labelling of PV equipment is a crucial aspect of

safety owing to the high DC voltages as well non-familiarity of technicians and
laymen with such a system. The labelling of a PV system should conform to IEC
62446 standard.

 IEC 62446, 1st Ed. (2009-05), “Grid-connected photovoltaic systems – Minimum

requirements for system documentation, commissioning tests and inspection,” defines the
minimal information and documentation required to be handed over to a customer following
the installation of a grid-connected PV system. This standard also describes the minimum
commissioning tests, inspection criteria and documentation expected to verify the safe
installation and correct operation of the system.

IEC 62446 stipulates that:

o All circuits, protective devices, switches and terminals are suitably labelled.
o All DC junction boxes carry a warning label indicating active parts inside the
boxes are fed from a PV array.
o Main AC isolating switch is clearly labelled, dual supply warning labels are fitted
at point of interconnection and a single line wiring diagram is displayed.
o Inverter protection settings, installer details and emergency shutdown procedures
are displayed on site.

b. Electrical Quality:

(i) DC Power Injection: Most grid-connected inverters are transformer-less, and hence,
utilities are concerned about DC power injection into the grid.

30
 IEC 61727, 2nd Ed. (2004), “Photovoltaic (PV) systems – characteristics of the utility
interface,” in Section 4.4 stipulates that the PV system shall not inject DC current greater
than 1 percent of the inverter rated output current into the grid.

 CEA’s (Technical Standards for Connectivity of the Distributed Generation Resources)

Regulations, 2010, in its Section 11 (2) stipulates that the distributed generating resource
shall not inject DC greater than 0.5 percent of the full rated output at the interconnection
point.

(ii) Harmonic Injection: Most inverters are rated for THD of less than 3 percent of power
injected into the grid, and hence, are suitable for interconnection from a harmonic
injection standpoint in India.

 CEA’s (Technical Standards for Connectivity of the Distributed Generation Resources)

Regulations, 2010, in its Section 11 (1) stipulate that harmonic current injections from a
generating station shall not exceed the limits specified in (Standard) IEEE 519.

 IEEE 519 (2014), “Recommended practice and requirements for harmonic control in electric
power systems,” stipulates the voltage and current harmonic injection limits as indicated
Table 4-2: and Table 4-3, respectively.

(iii) Phase Imbalance (or Unbalance): Phase imbalance can occur due to varied loads
and power injected into
Table 4-2: Voltage Distortion Limits as per IEEE 519 (2014)
different phases of the
distribution grid. The DISCOM Bus Voltage (V) at Individual Total Harmonic
should always limit its voltage PCC Harmonic Distortion (THD)
imbalance to less than 3
V< 1.0 kV 5.0 Percent 8.0 Percent
percent. Phase imbalance can
potentially arise from single- 1 kV <V< 69 kV 3.0 Percent 5.0 Percent
phase inverters feeding into 69 kV <V< 161 kV 1.5 Percent 2.5 Percent
the distribution grid. It is
161 kV <V 1.0 Percent 1.5 Percent *
recommended that DISCOMs
(Notes:
should keep track of the PV
PCC: Point of Common Coupling.
capacity connected to each *High-voltage systems can have up to 2.0 percent THD where the
phase for troubleshooting any cause is an HVDC terminal whose effects will have attenuated at points
extreme cases. in the network where future users may be connected.)

31
 (iv) Flicker: IEC 61000 Table 4-3: Current Distortion Limits as per IEEE 519 (2014)

is a set of Maximum Harmonic Current Distortion in Percentage of IL

standards on Individual Harmonic Order (Odd Harmonic)
electromagnetic
ISC/IL <11 11<h<17 17<h<23 12<h<35 35<h TDD
compatibility, which
are subdivided into <20* 4.0 2.0 1.5 0.6 0.3 5.0
sections that 20<50 7.0 3.5 2.5 1.0 0.5 8.0
define: 50<100 10. 4.5 4.0 1.5 0.7 12.0
o The 0
environment 100<1,000 12. 5.5 5.0 2.0 1.0 15.5
from the EMC 0
viewpoint and
>1,000 15. 7.0 6.0 2.5 1.4 20.0
establish the 0
compatibility (Notes:
levels that the Even harmonics are limited to 25 percent of the odd harmonic limits.
distributors Total Demand Distortion (TDD) is based on the average maximum demand current
must at the fundamental frequency, taken at the point of common coupling (PCC).
*All power generation equipment is limited to these values of current distortion
guarantee.
regardless of ISC/IL.
o The emission
levels into the networks and immunity levels of the appliances.

The relevant IEC 61000 sections

for electromagnetic compatibility Table 4-4: IEC Standards and Scope for Electromagnetic
including voltage fluctuation and Compatibility, Including Flicker

flicker are shown in Table 4-2: . Standard Subject Scope

IEC 61000-6-1 Immunity Residential and
 CEA’s (Technical Standards for IEC 61000-6-3 Emission Commercial
Connectivity of the Distributed IEC 61000-6-2 Immunity
Industrial
Generation Resources) IEC 61000-6-4 Emission
Regulations, 2010, in its IEC 61000-3-2 Harmonics
Section 11 (3) stipulate that IEC 61000-3-3 Voltage Inverter < 16 A AC
distributed generating resource Fluctuation and Current per Phase
shall not introduce flicker Flicker
beyond the limits specified in IEC 61000-3-12 Harmonics
Inverter > 16 A and
IEC 61000. IEC 61000-3-11 Voltage < 75 A AC Current
Fluctuation and per Phase
Flicker
 IEC 61727, 2nd Ed. (2004),
IEC 61000-3-4 Harmonics
“Photovoltaic (PV) systems – Inverter > 75 A AC
IEC 61000-3-5 Voltage Fluctuation Current per Phase
characteristics of the utility
and Flicker
interface,” in Section 4.3
stipulates that the operation of

32
 the PV system should not cause voltage flicker in excess of limits stated in the relevant
sections of IEC 61000-3-3 for systems less than 16 A or IEC 61000-3-5 for systems with the
current of 16 A and above.

(v) Power Factor: Grid-connected PV inverters are typically capable of injecting energy
into the grid at unity power factor, and hence tend to have a positive impact on the
grid.

 IEC 61215, 2nd Ed. (2005-04), “Crystalline silicon terrestrial photovoltaic (PV) modules –
Design qualification and type approval,” outlines all the procedures for sampling, marking
and testing of mono- and multi-crystalline silicon PV modules. The testing includes visual
inspection, maximum power determination, insulation test, measurement of temperature
coefficients, etc.

 IEC 61646, 2nd Ed. (2008-05), “Thin-film terrestrial photovoltaic (PV) modules – Design
qualification and type approval,” outlines all the procedures for sampling, marking and
testing of thin-film PV modules such as amorphous silicon, cadmium telluride (CdTe),
copper indium gallium selenide (CIGS), micromorph and similar technologies.

 IEC 62108, 1st Ed. (2007-12), “Concentrator photovoltaic (CPV) modules and assemblies –
Design qualification and type approval,” outlines all the procedures for sampling, marking
and testing of concentrator cell technologies and assemblies.

In addition to one of the above-mentioned three IEC certifications, all PV modules should also
be certified for IEC 61730 as a part of their safety qualification.

 IEC 61730-1, Ed. 1.2 (2013-03), “Photovoltaic (PV) module safety qualification – Part 1:
Requirements for construction,” describes the fundamental construction requirements for PV
modules in order to provide safe electrical and mechanical operation during their expected
lifetime.

 IEC 61730-2, Ed. 1.1 (2012-11), “Photovoltaic (PV) module safety qualification – Part 2:
Requirements for testing,” describes the fundamental construction requirements for PV
modules in order to provide safe electrical and mechanical operation during their expected
lifetime.

One or both IEC certifications may be applicable if PV modules are intended for continuous
outdoor exposure to highly corrosive wet environments.

(i) Performance Warranty: The performance warranty of a PV module is one of the most
critical considerations while procuring the module. The globally accepted
performance warranty commits less than 10 percent performance degradation in
power output during the first 10 years and less than 20 percent performance

33
 degradation during the subsequent 15 years. Tier-I module manufacturers also back
their performance warranty with bank guarantees as an added assurance.

(ii) Workmanship Warranty: The typical workmanship warranty on a PV module is five

years.

c. Mechanical and Workmanship Considerations:

(i) Inclination of PV Modules: The optimal angle of inclination of a flat plate solar collector
(which also includes a fixed PV module) is very close to the latitude of the location of
installation facing south for India.
(ii) Area of a Rooftop PV System: A rooftop PV system can take anywhere from 10 to 15 m2
of area per kilowatt of installation depending on the angle of inclination of the PV
modules.
(iii) Weight of the Rooftop PV System: The weight of a PV system (including the PV module
and structure) does not exceed 30 kg per m2. However, for mounting structures that are
not anchored into the roof, the weight of the PV system can be deliberately increased. In
any case, all terraces are designed to withstand the weight of PV systems.
(iv) Wind Loads: All MMS should be designed taking into consideration the wind loads at the
location of installation and should consider the ‘wind speed zone’ of the location as per
Indian Standard IS 875 (Part 3)-1987.

 IS 875 (Part 3)-1987, “Code for practice of design loads (other than earthquake) for
buildings and structures,” guide the design principles of wind loads to be considered when
designing buildings, structures and its components. This standard is directly applicable to
the design of PV module mounting structures.

The design document of a module mounting structure is a mandatory component of the overall
design of the rooftop PV system and should be developed or approved by a chartered structural
engineer. Readymade and modular mounting structures pre-certified for certain wind speeds
are readily available in the market, and the same can be directly used.

(v) Material of Mounting Structure: Galvanized iron (GI) or aluminium is the most common
material used for module mounting structures. In case of GI structures, the quality of
galvanization becomes very critical to ensure a rust-free life of at least 25 years.

(vi) Penetration and Puncturing of Roof or Terrace: Penetration into or puncturing the roof or
terrace for anchoring of MMS should be avoided as far as possible to avoid any water
leakage-related issues.

d. Other Considerations:

(i) Performance of a PV System: The quantum of energy output of a PV system depends on:

34
 o System properties such as its capacity, internal losses, and tracking (if used),
maintenance practices and frequency of cleaning.
o Weather parameters such as incident radiation and temperature as well as ambient
factors like fog and pollution.
o Gird parameters such as fluctuations in voltage and frequency, and availability.

(ii) Generation Guarantee: The generation guarantee sought by a utility (or in fact, any
stakeholder) may depend on the nature of ownership of the PV system.

o If the utility intends to procure the PV system (i.e., bears the capital expenditure) from
an EPC contractor, then the utility’s motivation is to maximize the energy generation
from the PV system. In this case, the utility should seek a generation guarantee from
the contractor based on a reference GHI data specified at the time of inviting the bid.
o If the utility intends to procure power (either through a PPA or net metering), then the
generation guarantee does not need to be stringent. The project developer or the
consumer itself will be motivated to generate maximum energy from the PV system. In
such a case, the utility’s interest in generation will be to meet its own RPO, hence, the
utility may provide a range in terms of capacity utilization factor (CUF) within which the
PV system should operate.

(iii) Monitoring of a Rooftop PV System: A PV system can be monitored at various levels

based on the capacity of the PV system and the type of involvement of the stakeholder.
This is generally done at the following levels:

o At PV Module-Level: done using micro-inverters or DC-DC converters/optimizers at

each module. However, such micro-inverters/converters/optimizers increase the
capital cost of the PV system.
o At String-Level: This is done mainly using current sensors to each string in the string
junction boxes which are connected to a supervisory control and data acquisition
system. String monitoring systems compare the electrical output of each PV string with
each other and also as a function of the ambient weather parameters.
o At Inverter-Level: The data of the inverter can be either read from their display or be
extracted by connecting USB or RJ45 cables, or wirelessly using Wi-Fi, ZigBee, Radio
Frequency (RF) or Bluetooth. Inverters may also be monitored remotely using
proprietary or third party equipment using GSM/GPRS.
o At Meter-Level: Meter-level monitoring of a rooftop or any other PV is the most critical
for utilities as well as investors, as the energy meter is directly linked to each
stakeholder’s revenue. Meter-level monitoring can be done either manually by the
meter reader once during a billing cycle; or at another extreme, on a real-time-basis
using remote wired or wireless communication.

35
4.4. Technical Documentation, Drawings and Inspection

a. Technical Documents of the Rooftop PV System

The inspection of a PV system may be guided by the IEC 62446 standard.

 IEC 62446, 1st Ed. (2009-05), “Grid connected photovoltaic systems – Minimum
requirements for system documentation, commissioning tests and inspection,”
defines the minimal information and documentation required to be handed over to
the customer following the installation of a grid-connected PV system.

The critical documents of the rooftop PV system include:

(i) Contact information of various stakeholders such as PV system owner, project

developer, EPC contractor, designer, lending agency, etc.
(ii) Datasheets of key equipment and the overall PV system.
(iii) IEC certifications of the PV modules and inverters.
(iv) Warranty documents of key equipment by Original Equipment Manufacturer.
(v) Design document of the module mounting structure.
(vi) Warranty document of the entire rooftop PV system as a whole by the installer.
(vii) Generation estimation report based on realistic weather conditions.
(viii) Operation and maintenance manual of the PV system.
(ix) Test results and commissioning certificate.
(x) Purchase bills and contracting documents.

b. Drawings of a Rooftop PV System

The critical drawings of the rooftop PV system include:

(i) Single Line Diagram (SLD);
(ii) Equipment layout diagram; and
(iii) Wire and earthing layout diagram.

c. Inspection and Testing of a Rooftop PV System

The inspection of a PV system may be guided by the IEC 62446 standard.

 IEC 62446, 1st Ed. (2009-05), “Grid connected photovoltaic systems – Minimum
requirements for system documentation, commissioning tests and inspection,”
defines the minimal inspection criteria to verify the safe installation and correct
operation of the PV system, as well as periodic retesting.

The overall objectives of rooftop PV system inspection are to:

o Visually inspect all equipment, component and connections, both electrical and
structural;

36
 o Verify the consistency of the overall installation with respect to its intended design;
o Ensure the necessary standard and safety compliance;
o Verify the performance of the PV system;
o Verify sufficiency of documents; and
o Identify remaining works of the project, if any.

The overall inspection activity of the rooftop PV system is divided into two parts: visual
inspection and testing.

(i) Visual inspection is done to verify:

o Installation, interconnection, workmanship, warranty compliance, ratings of
equipment, labelling, etc.
o Safety via over-current/voltage protection devices, residual current devices, surge
and lightning protection, disconnectors, earthing and other contingencies.
(ii) Testing:
o Performance testing of PV modules, strings, inverter, and overall system output.
o Safety testing for continuity, short circuit and open circuit, polarity, earthing,
insulation, islanding, and so on.

It is also highly recommended to undertake such inspections via third-party inspection and
testing agencies that specialize in such work. Such inspection agencies should have well-
trained manpower and equipment like I-V tester, weather monitoring equipment, infrared
imager, megger, etc. It is important that such agencies are not EPC contractors or project
developers in order to avoid any conflict of interest.

In conclusion, this chapter describes key technical considerations including type,

design, components, interconnection, standards, documentation and inspection of the
rooftop PV system. These technical considerations are critical considering the fact that
the PV system should safely and satisfactorily perform for at least 25 years.

37
5. Administrative Processes

5.1. Significance of Administrative Processes

While policy, regulation and standards define the framework, it is the actual implementation
which marks the success of the overall solar rooftop programme. Administrative processes
define the manner in which implementation can happen and hence, the administrative
processes are one of the most critical aspects of any solar rooftop programme at the State or
the national level.

Overall, the development of the rooftop PV sector depends upon the concerted action of a
number of key stakeholders. The roles and responsibilities of these stakeholders are highlighted
in the following sections of this chapter.

5.2. Roles and Responsibilities of Key Stakeholders

a. The Policy-maker: State’s Energy (or Power) Department

The rollout of a State’s solar rooftop programme can be formally marked by the launch of the
State’s solar rooftop policy. This could also be a general solar policy with components
addressing specific aspects and areas concerning solar rooftop systems and their development.

The State’s Energy (or Power) Department is the proponent of the solar rooftop policy. Once the
policy is launched, the Energy (or Power) Department should notify the other stakeholders
including the SERC and the DISCOMs on their roles and responsibilities as well as the
necessary action to be undertaken to implement the policy.

The Energy (or Power) Department should immediately set up a monitoring cell and instil it with
sufficient powers to monitor the progress of activities under the policy, and also address
concerns from stakeholders which would require amendments in the policy itself.

b. The Regulator: SERC

The regulator develops the necessary regulation addressing various provisions of the solar
rooftop policy which has been captured in Chapter 3 of this Guide. Based upon the power
instilled upon the regulator by the Electricity Act, 2003, the regulator may even develop the
regulations required for solar rooftop systems in the absence of a relevant policy. Such a
regulation would typically guide the interconnection process, tariff, banking, safety and similar
concerns. The regulation may be developed Suo Moto or through the petition by any
stakeholder.

c. DISCOM

The DISCOM interprets and implements the provisions of the policy and regulation, thereby

38
allowing consumers to interconnect their rooftop PV systems to the grid. In the process, they
should ensure overall safety, adherence to the overall technical guidelines, and follow
commercial processes. It should also be clarified here that the role of DISCOMs is only limited
to PV systems interconnected to the grid (i.e. grid-connected and hybrid PV systems), and not
stand-alone systems. The role of the DISCOM can be segregated based on the three phases of
the overall solar PV rooftop programme implementation:

(i) Preparatory phase of the programme

o Delegation of powers and empowerment of committees

o Budgetary approvals
o Regulatory approval of process, systems and formats
o Integration with existing processes and changes to billing software
o Empanelment and procurement
o Capacity building, information dissipation and publicity

(ii) Application and approval phase of individual rooftop PV system

o Receipt of application from the consumer for PV capacity and interconnection

o Screening of application, and preliminary technical and commercial approval by
DISCOM
o Post installation inspection of PV system and interconnection
o Verifying the results of the inspection by the Electrical Inspector and/or Third-
Party Inspector (TPI)
o Inspection, meter replacement and commissioning of the PV system by DISCOM

(iii) Operation and billing of individual rooftop PV system

o Billing to the consumer and ensuring payment for energy sold to the grid, if any
o Ensuring safety of the distribution network
o Data collection

d. SNA

The SNAs can play a vital role in promoting solar rooftop programmes. Traditionally, SNAs
have been the flag bearers of solar rooftop initiatives in India. Therefore, they have already
developed:

o Technical capacities for solar rooftop PV systems, and

o Channels for promoting solar rooftop programmes through funds and subsidies.

The SNAs should ensure that their processes are well-integrated with the DISCOM’s processes,
which are described following sections of this chapter.

39
e. The Chief Electrical Inspector (CEI)

One of the main functions of the CEI is to ensure safe operation of the solar rooftop PV system
as per the provisions laid out in the Electricity Act, 2003 and Indian Electricity Rules, 1956:

o Inspection and issue of statutory approvals for generator installations more than 10 kW
and others under Rule 47-A of Indian Electricity Rules, 1956.

o Inspection and approval of electrical installation in high rise buildings (of more than 15
meters height) under Rule, 50-A of Indian Electricity Rules, 1956.

Hence, the CEI’s involvement with respect to process is on two counts:

o First, during approvals of drawing and design documents, and

o Second, pre-commissioning inspection of the installed PV system for issue of the
‘Charging Certificate’.

It is often debated as to what should be the minimum PV system capacity that is required to be
approved by the CEI. While, it is commonly agreed that this minimum capacity can be around
10 kW (as has been decided by a number of states), it is highly recommended that smaller
systems should be inspected by the DISCOM itself prior to commissioning or a TPI agency
should be appointed to inspect PV systems, whether smaller or larger than 10 kW.

f. The Consumer, Investor and Developer

The consumer and developers (typically, third-party) are the key investors in the rooftop PV
system. The consumers evaluate the information available to them from DISCOMs and system
installers, and may only seldom refer to the policy and regulation.

The consumer would be responsible for the administrative paperwork for establishing and
running the PV system including investment, availing loans, application to DISCOM, availing
subsidies (if any), call for commissioning, operation, maintenance and other administrative and
technical compliances.

g. The System Installer

The system installer is appointed by the consumer or the developer to design, procure and
construct the rooftop PV system. The system installer should ensure that the system complies
with all statutory and technical guidelines and best practices, as the consumer may not be
technically well-informed. The system installer should install a robust PV system of good quality,
so that it can perform safely and maximize energy generation.

40
System installers are often MNRE Channel Partners, and have direct access to subsidies from
MNRE. It is recommended that the system installer should undertake the responsibility of
availing subsidy, if applicable, on behalf of the consumer.

5.3. The Interconnection Process

The interconnection process forms the heart of the engagement between the DISCOM and the
consumer (or the solar rooftop PV developer). A simple and efficient interconnection process is
the key to a successful solar rooftop programme as shown in Figure 5-1.

It is envisioned that net-metered PV systems would form a substantial part of the overall rooftop
PV installations in India. The present section describes a model interconnection process to set
up a net-metered rooftop PV system.

It is globally observed that DISCOMs often build in a number of checks and balances, which
complicate the process by making it redundant and
DisCom’s Activities Consumer’s Activities
repetitive, adding additional conditions, paperwork and
transactions; which usually happen due to lack of 1
Submission of application
domain knowledge or an indirect intent to discourage 2 for interconnection with:
Screening and preliminary • Consumer information
solar rooftop deployment. approval: • PV system capacity
• General screening • Acceptance of Terms
• Technical feasibility and Conditions
A simple yet effective interconnection process is
recommended, which is broadly divided into the 3
CEI/ Third Party inspection • Installation of system
following four steps and can be directly adopted by (wherever applicable) • Call for inspection &
interconnection
DISCOMs:
Figure 5-1: Overview of interconnection process. 4
Final inspection and
commissioning of the PV
system

41
 APPLICATION PROCESS Applicant downloads the Application Formats and Guidelines from the BESCOM website.

Applicant submits the Application Form online or offline duly attaching copy of electricity bill, photo and necessary
certificates.

Registration Fee shall be paid at Sub-division. If offline application is received, Assistant Executive Engineer (AEE)
converts it into online format.
REVIEW

Upon review at Sub-division, Assistant Executive Engineer issues approval letter for LT installations while Executive
Engineer (EE) issues approval letter for HT installations.

After installation of PV system, Applicant pays Applicant takes corrective action and applies again.
INSTALLATION

Facilitation Fee, procures bi-directional meter, gets it

tested at MT division and submits test reports. AEE/
EE (O&M) of Sub-division signs PPA with Consumer. Utility provides suggestions and reasons for failure.
Consumer requests for commissioning.
FAILS
COMM.*

After request of Applicant, AEE/ EE (O&M) tests, PV system commissioning test.

commissions and synchronizes PV system.
PASSES
BILLING

File is sent to Revenue Section in O&M Sub-division Utility issues Certification of Synchronization to
for billing. Applicant.
*Note: ‘Comm.’ means ‘Commissioning’

a. Application Submission by Consumer:

The consumer initiates the process of interconnection by providing necessary details such as:
o Name and type of applicant, along with identity proof.
o Type of consumer, along with copy of latest electricity bill.
o Capacity of the intended solar rooftop PV system.

This application forms the basis of the consumer’s interconnection agreement, and hence,
should be treated with equivalent statutory weightage.

The state regulatory commissions allow the DISCOMs to charge an application fee to recover
some of the transaction cost borne by the utility to interconnect solar rooftop systems. This
application fee, openly publicized by the DISCOM should ideally be a nominal flat fee. (A fee of
less than Rs. 500/- is recommended.)

b. Screening of Application and Preliminary Approval by DISCOM

The preliminary screening of the consumer’s application should take place within the local sub-
division office itself. The DISCOM should undertake the preliminary screening based on the
following:

42
General Screening
o Verification of consumer details provided in the application form, and
o Receipt of application fee.

Technical Feasibility
o Confirmation of the proposed capacity of the rooftop PV system based on the existing
sanctioned load of the consumer and relevant regulatory guidelines. (For example, some
regulation may stipulate that the PV system capacity should not exceed 50 percent of the
consumer’s sanctioned load.)

o Verification of technical feasibility of the proposed rooftop PV system based on the capacity
of the relevant distribution transformer. (While most distribution transformers can safely
facilitate 100 percent reverse power flow, some regulations or guidelines may stipulate that
the total PV capacity should connected to a given distribution transformer should not
exceed 30 percent capacity of that distribution transformer).

Upon successful screening, the DISCOM should intimate the consumer of Preliminary
Approval within 7 (seven) days of acceptance of the application.

What should be included in the DISCOM’s Preliminary Approval?

The DISCOM’s Preliminary Approval is important to the consumer as it not only formally
confirms to the consumer to commence installation of the PV system, but this commitment
by the DISCOM also enables the consumer to seek financial assistance such as loans,
investments, etc. and undertake other formalities for the PV system.

The Preliminary Approval should consist of:

o Acknowledgment of receipt of the consumer’s application, details, interconnection
request fees and proposed rooftop PV system capacity,
o Sanctioned capacity of rooftop PV system by the DISCOM,
o Procedure and timeline for installation of the PV system by the consumer, and call for
commissioning,
o Reference to the terms and conditions, standards and regulations to be followed by the
consumer (which should be approved by SERC, and amended from time to time upon
SERC’s approvals).

c. Installation of PV System and Call for Inspection and Interconnection

Once the consumer receives the Preliminary Approval, it can commence all its activities in a full-
fledged manner including:

• Selection of a rooftop PV system installer (or developer), if not already selected, and
awarding them the contract for installation (or project development);
• Application for bank loans; and

43
• Application for subsidies, which is usually through the system installer as they are also
MNRE Channel Partners.

Additionally, when the construction of the rooftop PV system is completed, then the consumer,
with the help of the system installer (or developer) should undertake the following activities:

• (If the PV system falls under the purview of the CEI, typically for capacities greater than 10
kW, then) Intimation to the Chief Electrical Inspector as per stipulated format for safety
inspection and obtain a ‘Charging Certificate’ for the PV system. A DISCOM or CEI may
also employ a TPI agency, which may inspect and certify the rooftop PV system at this point.
• (Once the Charging Certificate is obtained from the CEI, wherever applicable, then)
Application to the DISCOM for interconnection and replacement from existing unidirectional
meter to a bi-directional net-meter, i.e. commissioning.

This application should also consist of the necessary technical and administrative documents
required by the DISCOM, such as:

• Covering letter with reference to DISCOM’s Preliminary Approval and necessary

undertakings;
• Drawings: SLD; equipment layout and wiring; earthing layout with specification;
• Datasheets/specification: inverter; PV module; module mounting structure; AC and DC
junction boxes; surge protection devices; AC, DC and earthing cables/conductors; miniature
circuit breaker (MCB)/ moulded case circuit breaker (MCCB)/ earth leakage circuit breaker
(ELCB)/ residual current circuit breaker (RCCB)/ isolator;
• Certificates: IEC test certificates for PV modules and inverter(s); certificate from Licensed
Structural engineer for compliance of module mounting structure as per relevant Indian
Standards;
• Installer (or developer) information: contact information; (optional) contract information such
as contract price or power purchase rate with terms; operation and maintenance terms;
generation guarantee terms; etc.
• (Optional) Bank loan information

d. Inspection and Commissioning of the PV System by DISCOM

Once the DISCOM’s sub-division office receives the consumer’s call for inspection and
commissioning, it should directly undertake the following activities:

• Site visit and inspection to verify the installed PV system as per documents submitted; and
• Replacement of the existing unidirectional meter with a bi-directional net-meter.

e. Operation and Billing of Individual Rooftop PV System

Once the rooftop PV system is successfully commissioned, the development phase of the
rooftop PV system is complete. The DISCOM now has to focus on the following key activities:

44
• Billing to the consumer as per the DISCOM’s net-metering terms, conditions and
regulations;
• Ensuring safe operation of the rooftop PV system with respect to the grid as well as the
consumer, which can be done by regular or random site inspections and audits;
• It is also recommended for the DISCOM to observe and gather data on the performance
(generation) of the PV systems, as this data would be very useful for future techno-
commercial planning as well as verification of the system data provided by the consumer.

5.4. DISCOM’s Preparatory Processes

Although the DISCOM’s preparatory process for a solar rooftop programme are to be
undertaken prior to the launch of interconnection process, in this chapter they are discussed
after the description of the interconnection process so that the reader can appreciate why
specific preparatory processes are required.

a. Delegation of Powers and Empowerment of Committee

As rooftop PV systems are decentralized in nature, it is very important to delegate appropriate

powers to nodal offices in order to avoid any congestion in the administrative processes.

(i) Central Level:

o Administer the overall rooftop PV deployment for the DISCOM,

o Frame technical standards, administrative processes and relevant guidelines,
o Review and optimize technical standards and administrative processes based on
stakeholder (consumer, engineers, etc.) feedback from time to time,
o Undertake centralized initiatives such as regulatory approvals, empanelment of
equipment and contractors, publicity campaigns, staff and stakeholder training, etc.,
o Monitor multiple communication channels for consumers and other stakeholders, and
o Remove any difficulties that may arise anywhere throughout the rooftop PV
programme.

(ii) Sub-Division Level: This DISCOM’s local offices such as the sub-division office should
be empowered to undertake all activities such as accept and process consumer’s
applications, undertake feasibility studies, commission rooftop PV systems, and resolve
specific issues of the consumer.

b. Budgetary Approvals

Although any cost incurred by the DISCOM due to a solar rooftop programme can be passed
through and loaded on the consumer, there will often be instances when it may cause a burden
on DISCOM’s balance sheet and also on the State’s Exchequer. Hence, it is important to
understand the financial implication of a solar rooftop programme on the DISCOM.

45
c. Regulatory Approval of Process and Formats

Although the state may have a solar rooftop policy and regulation, the DISCOM should still get
its administrative interconnection process, terms and conditions, schedules and formats
approved by the SERC as there would be elements over and above those mentioned in the
policy or regulation.

d. Integration with Existing Processes and Changes to Billing Software

There would be some new process and some modification in existing processes within the
DISCOM, which should be defined prior to the launch of the rooftop PV programme. The new
processes to be established within the DISCOM include:
o Keeping record of consumer applications for interconnection and its status up to
commissioning,
o Keeping record of rooftop PV capacity allotted to (and commissioned at) each
distribution transformer and overall PV capacity within the DISCOM’s network, and
o Accepting calls for inspection and interconnection, and assigning a team for the same.

e. Empanelment and Procurements

Empanelment is a very important step for the DISCOM to ensure standardization and efficient
implementation of not only the correct equipment and systems, but also the overall process and
its compliance. Hence, it is recommended for the DISCOM to have some control over safety,
quality and economics of the rooftop PV system though such empanelment.

Certain aspects and components and discussed herein, which may be empanelled based upon
the DISCOM’s involvement and comfort level with the solar technology.

(i) System Installers: A DISCOM may empanel system installers for the following activities:

o Install technically compliant and safe PV systems,

o Offer PV systems and services at a reasonable price and terms to the consumer,
o Follow all compliance norms of the DISCOM, and
o Educate and assist consumer with appropriate administrative processes.

The MNRE has already empanelled system installers, who are known as ‘Channel
Partners’, through a certain amount of techno-commercial screening. These Channel
Partners are already aware of the requisite technical standards and also the
administrative processes to avail MNRE subsidies and other provisions (such as duty
exemption, etc.). Hence, it is recommended that the DISCOM can directly empanel
these Channel Partners.

46
 (ii) Inverters: The inverter is the brain of the PV system, which undertakes key functions
such as synchronization of the PV system with the grid and ensures safety compliance
for both, the grid as well as the PV system. There are several technical considerations
for the interconnection of a PV system, including safety (e.g. anti-islanding) and power
injection quality (e.g. harmonic distortion, surge protection, DC injection, etc.), which are
taken care of through the inverter (as discussed in Section 4.4 of this Guide).

Hence, it is recommended to pre-approve and empanel inverter makes and models, so

that system designs can be approved at the DISCOM’s local (sub-division) office with
more confidence. Moreover, inverter empanelment can be an ongoing process.

(iii) Net-meters: Meters are one of the key equipment for the DISCOM, as they are directly
linked to the DISCOM’s revenue. The DISCOM needs to ensure purchase of appropriate
bi-directional net-meters for different capacities. There is only a minor software change
required from the meter-manufacturer’s side.

It is also recommended to procure meters with communication ports such as RS-232/

485 and standard protocols such as IEC 62056 or DLMS), so that such meters are also
ready for functionalities that may be required in the near future such as remote meter
reading and communication, energy prediction, energy audit, ToD tariff, etc.

f. Capacity Building

Capacity building of both DISCOM engineers as well as system installers is important to ensure
correct technical and procedural compliance under the solar rooftop programme. The DISCOM
engineers should be trained on:
o Solar technology, safety, standards and performance,
o Administrative processes for interconnection and reporting issues, and
o Soft skills and customer relations.
The system installers should be trained on:
o Technical requirements of the DISCOM,
o Compliance with administrative processes of the DISCOM, and
o Providing honest and reliable services to the consumer.

g. Information Dissipation and Publicity

As a solar rooftop programme is also social in nature, it is equally important to educate the
consumer regarding:
o The solar technology, its possibilities and its limitation,
o Investing in a rooftop PV system and its payback,
o Selecting the right system installer, and with appropriate terms and conditions,
o Administrative processes for establishing a rooftop PV system, and

47
o Encouragement by the DISCOM to adopt rooftop PV systems.

In conclusion, this chapter covers key administrative processes associated with a solar
rooftop PV programme. These administrative processes are the keys to a successful
rooftop programme. Once the rooftop PV programme commences, the administrative
processes will automatically evolve based on sensible monitoring of the process and
stakeholder feedback. Hence, these processes should also be governed by a competent
and empowered authority of the DISCOM.

48