How Solar Rooftop Are Transforming the Energy Sector?
The global solar rooftop market has been showing a good growth over the past few years and is expected to continue witnessing a solid growth over the forecast period. The growth of the market is gaining momentum on account of growing focus on the decarbonisation of the energy sector and reduction of carbon emissions worldwide. Governments and international organizations have been continuously working on the pathway for the deployment of low-carbon technology towards a sustainable and clean energy future. Energy sector transformation main goal is to reduce the energy-related CO2 emissions by way of rapidly shifting away from fossil fuels consumption towards cleaner renewable forms of energy. Rapidly declining cost of renewable energy cost is one such driver that is bolstering the installation rate of solar rooftops. According to the IRENA, the global weighted average cost of electricity from all commercially available renewable power generation solutions continued to fall in 2018. Increasing economies of scale and technological improvements will further continue to drive down the total installation cost of solar PV projects from $1,210 per kW average in 2018 to a range of $340 to $834 kW by 2030.
Supportive government initiatives and policy measures are also fueling the solar rooftop market growth. Governments are continuously trying to reduce carbon footprint while fulfilling the ever-increasing demand for cleaner energy. In December 2019, in India, the Karnataka Electricity Regulatory Commission (KERC) decided to encourage third-party investments in residential solar rooftop projects to accelerate capacity additions in the rooftop solar segment. In 2018, the Israeli government launched a new incentive scheme for rooftop solar PV. The scheme mainly focused on the deployment of 1.6 GW of rooftop PV capacity during the course of the next three years which is further aimed to achieve the country’s renewable energy target by 2020.
Furthermore, various government policies in major developing countries are promoting sustainable use of energy regarding the promotion of rooftop solar panels like subsidies, loan facilities, and others. For instance, the rooftop scheme by the Solar Energy Corporation of India launched a tender which offered a 30% subsidy to the residential sector, private NPO’s, educational organizations and health institutions. This tender is an initiative for generating the momentum and achieving the target of 40GW of rooftop solar power generation by 2022. In January 2019, the Canadian government for the support and development of solar energy in Alberta, Canada, in which includes an investment of approximately $50 million to use the bi-facial solar PVs on a large scale for both the residential and commercial sector, thus anticipating the market growth during the forecast period.
However, recent COVID-19 global pandemic outbreak disrupting the global supply chain, lower power demand, and currency fluctuations making component costs has negatively impacted the global solar rooftop market. The major supply disruption caused by shutdown in China, the leading manufacturer of solar panels, is the major factor that has led to a decline in solar rooftop market growth. Moreover, construction activity has been also affected due to mandatory regulations regarding social distancing which has further deteriorated the market growth.
Although most of the solar rooftop’s troubles are due to social distancing measures that have closed off door-to-door sales channel, manufacturers are expecting for the situation to get worse even after shutdown measures are phased out. With a long halt in production, solar component prices are projected to initially rise due to shortage of raw materials till the shipping from China resumes and logistical issues due to lockdown. Also, a shortage of workforce could also mean a rise in labor cost in the short term.
Immense growth potential held by this market is attracting investments by many market players into research and development, and in business expansion, thus augmenting the growth of Solar Rooftop Market.
Competitive Scenario in the market
The key players in the market are investing heavily into this market in order to develop more efficient and new products for the purpose of expanding their product offerings. Also, investments into facility expansion and into partnerships and agreements are also supporting the market growth. Some of the key developments in the solar rooftop market are listed below:
Recently in February 2020, the International Finance Corporation (IFC) and Massader, a subsidiary of the Palestine Investment Fund (PIF) have signed a loan agreement to fund the installation of solar rooftop panels across the West Bank region. The loan package includes $8.1 million from Finland-IFC Blended Finance for Climate Program and the Dutch MENA Private Sector Development Program along with an $8.1 million loan from IFC. Furthermore, the World Bank has also announced to provide a grant of upto $2 million from the Investment Co-Financing Facility to help Massader solarize nearly 500 public schools in order to power 16,000 houses in the West Bank region.
Ever Source Capital, a joint venture between Lightsource BP and PE firm Everstone Capital, has recently acquired solar rooftop company Origin Renewables as a part of its strategy to enter the commercial and industrial solar rooftop business.
Recently in January 2020, SIL Rooftop, a wholly owned subsidiary of SunEdison Infrastructure Ltd, has acquired Sherisha Solar Private Ltd with an aim to deliver high-performance solar assets to its customers with improved customer service and visibility.
The Indian government has recently launched a Mobile App for solar rooftop systems called ARUN- Atal Rooftop Solar User Navigator- in order to monitor and manage the installation of solar rooftop system
In September 2017, MYSUN and GCL System Integration Technology partnered to launch ‘GCL G-Home rooftop solar kits especially made for the Indian market to speed up the installation process while enhancing performance and safety.
