Quantifying Rooftop Solar Benefits: a State-Level Value of Solar Analysis for India

Driven by India’s ambitious rooftop solar (RTS) goals, individual states have designed solar policies and compensation mechanisms to help achieve specific targets established for each state. As costs decline and these systems are more widely adopted, policymakers, regulators, and other stakeholders may want to better understand the net costs and benefits of RTS to adopting and non-adopting customers, the grid, distribution companies (DISCOMs), and other power system stakeholders. Any financial concerns can be addressed in part through changes to how RTS is compensated and to underlying retail tariffs for RTS customers. Analyses that quantify the costs and benefits associated with RTS adoption and operation can inform decision makers in the development and evaluation of RTS policies. One such analysis is a value of solar (VOS) study, which quantifies select costs and benefits surrounding RTS based on electricity system and other local data. This report provides a VOS analysis for two states in India: Gujarat and Jharkhand. The methodology considers four benefit categories (Energy, Generating Capacity, Transmission Capacity, and Environmental and Health), two cost categories (Program Administrative Costs and RTS Integration Costs), and two scenarios (existing levels of renewable energy capacity and significant capacity additions to meet established renewable energy targets). Between the two states analyzed, there are significant differences in power system sizes and generation mix, renewable energy targets and resource potential, as well as adopted compensation mechanisms. While there are some similarities in analysis results for each state, differences in the power system contexts outlined above have also led to significant differences in the values for RTS in the two states. The total VOS is lower in Jharkhand than in Gujarat, owing to the differences in Energy and Generating Capacity values (at existing solar photovoltaic [PV] penetrations). The lower relative Energy and Generating Capacity values in Jharkhand are, respectively, associated with lower overall electricity generation costs in Jharkhand and poor alignment between RTS generation and system peak demand in Jharkhand.