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Valuing Grid-connected Rooftop Solar- A Framework to Assess Costs and Benefits to Discoms

Valuing Grid-connected Rooftop Solar- A Framework to Assess Costs and Benefits to Discoms

Copyright © 2019 Council on Energy, Environment and Water (CEEW).

Suggested citation: Kuldeep, Neeraj, Kumaresh Ramesh, Akanksha Tyagi, and Selna Saji. 2019.
Valuing Grid-connected Rooftop Solar: A Framework to Assess Costs and
Benefits to Discoms. New Delhi: Council on Energy, Environment and Water.

Disclaimer: The views expressed in this report are those of the authors and do not
necessarily reflect the views and policies of CEEW or BRPL. The views/
analysis expressed in this report do not necessarily reflect the views of
Shakti Sustainable Energy Foundation. The Foundation also does not
guarantee the accuracy of any data included in this publication nor does it
accept any responsibility for the consequences of its use.

Publication team: Alina Sen (CEEW), Mihir Shah (CEEW), The Clean Copy, Aspire Design, and
Friends Digital.
We would like to thank the Shakti Sustainable Energy Foundation for their
support on this report.
Organisations: The Council on Energy, Environment and Water (ceew.in) is one of South
Asia’s leading not-for-profit policy research institutions. The Council uses
data, integrated analysis, and strategic outreach to explain and change the
use, reuse, and misuse of resources. It prides itself on the independence
of its high-quality research, develops partnerships with public and private
institutions and engages with the wider public. In 2019, CEEW has once
again been featured across nine categories in the 2018 Global Go To Think
Tank Index Report. It has also been consistently ranked among the world’s
top climate change think tanks. Follow us on Twitter @CEEWIndia for the
latest updates.
Shakti Sustainable Energy Foundation works to strengthen the energy
security of the country by aiding the design and implementation of policies
that encourage energy efficiency, renewable energy and sustainable
transport solutions, with an emphasis on subsectors with the most
energy saving potential. Working together with policy makers, civil society,
academia, industry and other partners, we take concerted action to help
chart out a sustainable energy future for India (www.shaktifoundation.in)
About CEEW
The Council on Energy, Environment and Water (CEEW) is one of South Asia’s leading not-for-profit policy
research institutions. The Council uses data, integrated analysis, and strategic outreach to explain – and
change – the use, reuse, and misuse of resources. The Council addresses pressing global challenges through
an integrated and internationally focused approach. It prides itself on the independence of its high-quality
research, develops partnerships with public and private institutions, and engages with the wider public.
In 2019, CEEW once again featured extensively across nine categories in the 2018 Global Go To Think Tank
Index Report, including being ranked as South Asia’s top think tank (15th globally) with an annual operating
budget of less than USD 5 million for the sixth year in a row. CEEW has also been ranked as South Asia’s top
energy and resource policy think tank in these rankings. In 2016, CEEW was ranked 2nd in India, 4th outside
Europe and North America, and 20th globally out of 240 think tanks as per the ICCG Climate Think Tank’s
standardised rankings.
In nine years of operations, The Council has engaged in over 230 research projects, published over 160
peer-reviewed books, policy reports and papers, advised governments around the world nearly 530 times,
engaged with industry to encourage investments in clean technologies and improve efficiency in resource
use, promoted bilateral and multilateral initiatives between governments on 80 occasions, helped state
governments with water and irrigation reforms, and organised nearly 300 seminars and conferences.
The Council’s major projects on energy policy include India’s largest multidimensional energy access
survey (ACCESS); the first independent assessment of India’s solar mission; the Clean Energy Access
Network (CLEAN) of hundreds of decentralised clean energy firms; the CEEW Centre for Energy Finance;
India’s green industrial policy; the USD 125 million India-U.S. Joint Clean Energy R&D Centers; developing
the strategy for and supporting activities related to the International Solar Alliance; designing the Common
Risk Mitigation Mechanism (CRMM); modelling long-term energy scenarios; energy subsidies reform; energy
storage technologies; India’s 2030 Renewable Energy Roadmap; energy efficiency measures for MSMEs; clean
energy subsidies (for the Rio+20 Summit); Energy Horizons; clean energy innovations for rural economies;
community energy; scaling up rooftop solar; and renewable energy jobs, finance and skills.
The Council’s major projects on climate, environment and resource security include advising and
contributing to climate negotiations in Paris (COP-21), especially on the formulating guidelines of the Paris
Agreement rule-book; pathways for achieving INDCs and mid-century strategies for decarbonisation;
assessing global climate risks; heat-health action plans for Indian cities; assessing India’s adaptation gap;
low-carbon rural development; environmental clearances; modelling HFC emissions; the business case for
phasing down HFCs; assessing India’s critical minerals; geoengineering governance; climate finance; nuclear
power and low-carbon pathways; electric rail transport; monitoring air quality; the business case for energy
efficiency and emissions reductions; India’s first report on global governance, submitted to the National
Security Adviser; foreign policy implications for resource security; India’s power sector reforms; zero budget
natural farming; resource nexus, and strategic industries and technologies; and the Maharashtra-Guangdong
partnership on sustainability.
The Council’s major projects on water governance and security include the 584-page National Water
Resources Framework Study for India’s 12th Five Year Plan; irrigation reform for Bihar; Swachh Bharat;
supporting India’s National Water Mission; collective action for water security; mapping India’s traditional
water bodies; modelling water-energy nexus; circular economy of water; participatory irrigation management
in South Asia; domestic water conflicts; modelling decision making at the basin-level; rainwater harvesting;
and multi-stakeholder initiatives for urban water. management.

Contents
Executive summary xi
1. Introduction 1
2. Implications of rooftop solar on discom revenues 3
3. Need to look beyond net-metering 5
4. Value of grid-connected rooftop solar (VGRS) 7
5. Assessing discom losses and gains from rooftop solar 9
5.1 Avoided generation capacity cost (AGCC) 9
5.2 Avoided power purchase cost (APPC) 10
5.3 Avoided transmission charges (ATRC) 11
5.4 Reduced transmission and distribution losses 12
5.5 Avoided distribution capacity cost (ADCC) 12
5.6 Avoided renewable energy certificate cost (ARECC) 13
5.7 Avoided working capital requirement (AWCC) 14
5.8 Revenue loss 14
5.9 Programme administration cost 15
5.10 Added distribution services cost 15
6. BRPL case study 17
6.1 Data inputs and assumptions 17
6.2 Key observations and recommendations 19
Annexure 25
References 27
Figures
Figure ES1: Generation-normalised aggregate costs and benefits for selected ten DTs xvi
Figure 1: Generation-normalised aggregate costs and benefits for selected ten DTs 20
Figure 2: Capacity-normalised values for individual costs and benefits parameters 21
Figure 3: Generation-normalised values for individual costs and benefits parameters 21
Tables
Table ES1: Specifications and performance characteristics of rooftop solar systems xv
Table ES2: Generation-normalised net value for each DT (all values in INR/kWh) xvi
Table ES3: Generation-normalised aggregate costs and benefits for selected ten DTs xvi
Table 1: List of benefits and costs considered in the UCT 9
Table 2: List of input parameters and associated assumptions 17
Table 3: Specifications and performance characteristics of rooftop solar systems 19
Table 4: Capacity and generation-normalised aggregate costs and benefits for
selected ten DTs 20
Table 5: Capacity-normalised values of costs and benefits (all values in INR/kW) 20
Table 6: Generation-normalised values of costs and benefits (all values in INR/kWh) 2

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