What are the financial benefits to participating DISCOM?

Apart from some benefits like meeting the increasing power demand, the rooftop solar assists distribution companies balance their peak demand cycles during daytime and also reduces transmission and distribution (T&D) losses as the power is consumed at the point of generation.

In addition to the above benefits, since DISCOM is required to incur additional expenditure for implementation of the programme in terms of implementation of tenders,  additional man-power, creating infrastructure, capacity building, awareness, etc., these will be compensated by providing service charges and performance-linked incentives, under the Phase-II Grid Connected Rooftop Solar and Small Power Plant programme of Government of India, as explained below.

1. A service charge of 3% of eligible Central Financial Assistance (CFA) for implementing the programme under Component-A of the scheme. The service charges will essentially cover but not be limited to the following: –

  • demand aggregation activities,
  • creation of working RTS cell in DISCOM
  • bid process management
  • program implementation
  • availability and streamlining the process of net-metering /billing
  • inspection, monitoring, development of online portal
  • training of DISCOM officials
  • awareness programs for the proliferation of rooftop solar PV projects
  • creation and operating project management cell in MNRE etc.

2. An incentive for each MWp capacity of solar rooftop, added by DISCOM in their distribution area over and above 10% of base capacity installed at the end of the previous year.

The incentives will be given on incremental rooftop solar capacity installed by the DISCOM in their distribution area from the installed base capacity* (at the end of the previous financial year) within the timeline of 12 months (financial year-wise) and so on till the duration of the programme. The incentive pattern would be a progressive one with higher incentive rates for higher levels of achievement.

This incentive mechanism has been illustrated through some examples in the below table.

* cumulative capacity of grid-connected rooftop solar plants (in MWp) installed in their distribution area as on 31st March 2019. This will be taken as the installed base capacity for the first year of participating DISCOM.


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