Solar Business Models To Bypass Subsidy Hurdles

Given the fact that Indian terrain is one of the most suitable one in world for solar (high irradiation), the country offers tremendous opportunity for the investors and manufacturers to scale up their solar business in India. With such an opportunity, power generators are willing to take initiatives even in uncertain regulatory environment, by reaching out directly to the consumers. They are gearing up to bring innovation in their business models to move away from policy based projects (traditional FiT). Favorable market trends such as declining solar PV prices, rising conventional power prices, and frequent power cuts are creating a conducive environment for parity based market.

RESCO (renewable Energy Services Company) model allows the consumer to pay a per unit price for power. Under this model, the consumer can do away with conventional ‘CAPEX’ model, and still can install a solar power plant. Instead, the consumer has to sign a power purchase agreement with the installer at a mutually agreeable price.

Another model under consideration is ‘Local micro utility model’. The project developers can rent rooftop space in a building, install the plant, and sell the power back to the building owner.

Such consumer driven models will certainly open floodgate of opportunities for the project developers.

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