Adaptive Decentralized Payback Normalization for Socio-Economic Rebalancing of RE subsidies - A Case Study

Abstract

Clean energy subsidies are designed to stimulate consumer participation and deliver greater benefits to society. India has a fixed centralised federal subsidy model for residential rooftop solar (RTS). Different states have different tariff schemes for electricity consumption and RTS feed-in. Thus, grid parity, payback period (PBP), and willingness to pay (WTP) differ for consumers of different states and income classes, resulting in social and geographical disparity in RTS implementation. A Socio-Economic Rebalancing of RE subsidies thus becomes necessary. This paper proposes a novel adaptive decentralised heterogeneous PBP equalisation-based subsidy policy to enhance the WTP for all prosumers and ensure uniformity of RTS implementation. A two-stage subsidy optimisation is conducted using a case study in diverse states to achieve Grid Parity initially and subsequently desired PBP for all states and income classes. The proposed subsidy ensures grid parity for all, sufficient to transit all the prosumers to 100% net electricity from RTS. The subsidy is further normalised by equalising the PBP to a target PBP thereby ensuring uniformity of RTS implementation in the country bridging the rural-urban WTP disparity, leading to a better social scenario. The strategy is adaptive to the future, as the subsidy can be revised with changes in techno-economic parameters.