For anyone hopeful of the global energy system’s transition to a more sustainable paradigm, solar energy is a key part of the solution. For most people envisioning such a transition, what comes to mind first is millions of solar panels upon the rooftops of houses, factories and buildings, powering away our planet to a greener future. It’s an inspiring image indeed, but far from the reality of solar deployment we are witnessing globally today.
Solar is particularly suitable for smaller, decentralized rooftop solutions: PV panels are relatively light and easily transportable. Further, PV system designs are highly customizable and technically feasible PV systems are possible down to the smallest kWs. Importantly, the idea that people can access truly renewable, clean energy right there on their roofs without relying on some large, monopolistic utility is a hugely attractive one: in the case of developed countries it means freedom from historically rising electricity prices and in the case of developing countries like India or those in Africa, access to more reliable energy.
That idea is also increasingly economically feasible. Rooftop solar has been viable in the U.S. for several years with support from regulatory enablers like net-metering and incentives like the federal investment tax credit. Unlocked by the Renewable Energy Service Company (RESCO) model, more popularly known as Zero-Down Solar, the rooftop solar market (residential and non-residential combined) has more than tripled in the past five years.
That success has further spawned rooftop solar markets in Mexico and Brazil, that already have similar net metering policies, hundreds of installers, and highly competitive solar electricity rates. Though in their early stages, rooftop markets in both countries are expected to double every year for the next 3-5 years.
A similar kickoff of rooftop solar is underway in India. Net metering policies in almost all states combined with high grid electricity rates for commercial and industrial consumers are positioning solar as an increasingly competitive alternative. For residential consumers too, especially in smaller cities, while solar does not offer savings on electricity bills yet (this can be different in cities like Delhi and Mumbai that have some of the highest residential grid electricity rates), the draw of reliable electricity during the day as an alternative to the often-rationed grid electricity is significant. In India too, installers following the RESCO model are increasing in number. With close to a gigawatt already installed, the segment could grow tenfold in another 4-5 years.
Perhaps the most impressive success of rooftop solar is in East Africa. There, off-grid solar business models have taken flight to fill the access to energy gap that is severe in the region. There too, solar’s cost competitiveness has been a key driver in the face of relatively high energy costs for those consumers relying on expensive and unhealthy kerosene and diesel. The big push in the market though has come from the “pay-as-you-go” business model innovation through mobile payment platforms like M-PESA and through smart digital technologies that are being deployed by the likes of SteamaCo and BBox.
The strong takeoff of rooftop solar across continents might suggest that the vision of decentralized solar as the harbinger of the global energy transition is coming true. But, the reality is that its older, less sexy cousin – good old multi-megawatt utility-scale solar, is far outdoing it and making the argument for “bigger is better.”
More on that in part 2 of this post…