MNRE Proposes RESCO, Aggregation Model To Boost Rooftop Solar

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The Ministry of New and Renewable Energy (MNRE) has released draft guidelines aimed at boosting the growth of the residential rooftop solar segment. According to the draft plan, rooftop solar systems can be installed on consumers’ rooftops without requiring any initial capital investment. The ministry has asked the public and the stakeholders concerned to send their suggestions to these proposals by September 17.

To accelerate the adoption of rooftop solar, MNRE has proposed two key approaches: the use of Renewable Energy Service Companies (RESCOs) and Utility-Led Aggregation models under the PM Surya Ghar scheme. These approaches are designed to increase demand and installations in the residential sector.

The draft guidelines state that grid-connected rooftop solar projects for residential consumers will be eligible under these arrangements. In addition to rooftop, terrace, and balcony solar systems, special systems such as Building Integrated Photovoltaics (BIPV) will also be included.

MNRE clarified that projects utilizing Group Net Metering and Virtual Net Metering will be eligible for central subsidies under these arrangements.

RESCO Model

Under the RESCO model, consumers can have rooftop solar systems installed without bearing the upfront cost. The RESCO operator will cover the installation and maintenance costs and provide the generated solar power at a rate lower than grid-supplied electricity.

Utility-Led Aggregation Model

In the Utility-Led Aggregation model, DISCOMs or other government-approved entities will install rooftop solar systems on behalf of consumers. Two sub-models have been proposed:

1. Utility-Owned Assets Model:

In this model, the rooftop solar system will remain under the utility’s ownership for a minimum of five years. The utility will aggregate demand from interested consumers and install the systems as a RESCO entity. Installations may be carried out under an EPC (Engineering, Procurement, and Construction) arrangement or through sub-RESCO entities, selected through competitive bidding or by matching feed-in tariffs set by the respective Electricity Regulatory Commission.

The utility will be responsible for payments to the EPC or sub-RESCO entities over the project period. The generated solar power may be sold to consumers, DISCOMs, or both under a Power Purchase Agreement (PPA).

2. Consumer-Owned Assets Model:

In this model, the installed rooftop solar system will be owned by the consumer, with the utility providing an additional grant to cover installation costs. The utility will aggregate demand from eligible consumers and implement the installations as an EPC entity. Similar to the first model, EPC vendors will be selected through competitive bidding or by matching feed-in tariffs.

In this case, the utility will handle payments to the EPC vendors, and consumers may contribute up to 10% of the benchmark cost (currently ₹5,000/kWp). MNRE has clarified that households with pre-existing rooftop solar installations will not be eligible for the RESCO and Utility-Led Aggregation models.