Is Community Solar A Key Piece In India’s Clean Energy Strategy?

India’s ambitious renewable energy targets highlight a promising model for democratizing access to clean energy—community solar. Despite the global momentum and success stories, community solar has faced hurdles in gaining traction within India. With existing financial support for various clean energy schemes, the path from concept to a widespread adoption has not been smooth in the country.

So, why hasn’t community solar taken off in India like it has elsewhere? What can India learn from global successes? And why does this model even matter? Let’s explore these questions one by one.

Why Community Solar Matters?

Imagine a future where clean energy isn’t just a privilege for the few but a right for all. That’s the promise of community solar. It’s a model that allows individuals, businesses, and organizations to share the benefits of a single solar array—without needing to install panels on their properties. In a country like India, where urban areas are densely packed, and rooftop space is limited, community solar could be the key to unlocking widespread access to renewable energy.

The environmental impact of the concept is profound. By increasing solar adoption, these projects can help slash India’s carbon footprint, contributing significantly to global climate change mitigation efforts. Every community that goes solar brings us closer to reducing greenhouse gas emissions on a large scale.

But it’s not just about the environment. it also has the potential to generate 2.8 lakh jobs by 2030 in the renewable energy sector, stimulate local economies by keeping energy spending within communities, and help participants save on their energy bills. In short, the concept is a win-win for sustainability and economic growth—a smart choice for India’s future.

Challenges Facing Community Solar in India

Community solar projects in India are still in the early stages, notable initiatives in India for shared clean energy include the Dharnai Solar Microgrid in Bihar, Rajasthan Solar Park in Dhursar, Delhi Solar Rooftop Program, Uttar Pradesh Mini-Grid Projects, Kerala’s Soura Project, and Madhya Pradesh’s rooftop solar projects. These projects are still in the pilot stage due to several challenges.

Policy and Regulatory Barriers

One of the reasons that’s stalling India’s community solar efforts is the absence of a clear national policy. Unlike the US, where strong policies fuel growth, India’s lack of cohesive guidelines creates uncertainty for developers and investors. The complex and varied regulatory processes across states only add to the challenge, making it tough for projects to take off.

One prominent example is from Uttar Pradesh Mini Grid Projects. For instance, the regulatory process for setting up solar projects has been particularly challenging due to the state’s slow and inconsistent approval procedures. Developers have faced delays in obtaining necessary permits and clearances, which has made it difficult for such initiatives to proceed smoothly.

Similarly, in Maharashtra, the process of obtaining approvals from multiple agencies, including the state electricity regulatory commission, local government bodies, and utilities, has often led to significant delays. These bureaucratic hurdles discourage developers from investing in community solar projects in these states, despite the high potential for solar energy generation.

Financial Barriers

High upfront costs are a major roadblock for community solar in India. Even with financial incentives, accessing funds remains difficult, especially for smaller developers and low-income communities. Traditional lenders see these projects as risky, stifling growth in areas with high potential.

Lack of Awareness

The lack of awareness among the citizens about the concept and its advantages has been a major challenge. Many potential beneficiaries are simply unaware of its benefits. Without strong community engagement and widespread knowledge, these projects struggle to gain the support needed to succeed.

Learning from Global Success Stories: What India Can Adopt?

India can leapfrog its challenges by drawing inspiration from countries where community solar has thrived.

The US: A Proven Model 

In the United States, Since the first community solar project in Ellensburg, Washington, in 2006, the concept has spread like wildfire.

By 2022, there were 2,550 such projects across the US, with 93 percent concentrated in just 10 states. Florida, New York, Minnesota, and Massachusetts lead the charge, thanks to state-specific programs that have propelled community solar into the mainstream.

But it’s not just about numbers. The US market thrives on robust public policy support. States like Illinois, New Jersey, New York, and Maryland have embraced community solar on commercial buildings, driven by favorable legislation and ample real estate supply.

The United States provides a blueprint for success with strong policies like the Investment Tax Credit (ITC), which allows developers to offset project costs. States with renewable portfolio standards (RPS) and virtual net metering (VNM) have made it possible for consumers to benefit from solar energy even if the panels aren’t on their property. 

Innovative financing options, such as subscription models and power purchase agreements (PPAs), have made these group projects accessible to a broad audience. But it’s not just the US making strides. Countries around the world are also embracing community solar with increasing enthusiasm.

Germany: National Integration 

Germany’s community solar success stems from integrating it into national renewable energy goals. With market mechanisms like feed-in tariffs and Renewable Energy Certificates (RECs), Germany has made community solar financially viable. This approach has boosted solar capacity and fostered a sense of ownership among local communities.

Japan: Community Ownership 

Japan’s model emphasizes community ownership and public engagement. By allowing residents to own and operate their renewable energy projects, Japan has ensured that benefits remain local, gaining strong public support. Their focus on education and involvement from the outset has been key to their success, offering valuable lessons for India.

Current Policies in India

Despite the challenges, India’s policy landscape presents opportunities for community solar growth. The government’s increased focus on boosting solar capacity and reducing carbon emissions present a favorable environment for its adoption. Policies like virtual net metering (VNM) and feed-in tariffs could enhance the appeal of community solar, making it more attractive for both developers and consumers.

Furthermore, initiatives like PM-KUSUM, which promote rural development and energy access, provide a solid foundation for expanding the concept in rural areas. Integrating these projects into such programs could help deliver clean energy to underserved communities.

However, to fully harness the potential of the concept for India, more targeted policies are needed. Simplifying regulatory processes, offering specific financial incentives, and encouraging state-level strategies could significantly advance community solar projects. Additionally, innovative financing models, such as public-private partnerships or dedicated community solar funds, could help overcome financial barriers and broaden participation.

Community Solar for a Sustainable Future

Community solar in India can offer a middle-ground solution to expand clean energy access, especially for low-income households and urban areas where rooftop solar could be challenging due to space constraints. By allowing multiple households to share a single solar installation, it helps reduce costs, and supports energy equity. 

It aligns with India’s rural development goals and can be integrated into existing initiatives like PM-KUSUM and SURYODAYA Scheme to reach underserved communities. However, to realize its potential, India needs supportive policies, simplified regulations, and innovative financing models to drive adoption and make community solar a key part of the country’s energy future.