Policy assistance for adoption of residential solar PV in India: A stakeholder-centric approach for welfare optimization

Abstract

This paper presents a comprehensive analysis of the consumer-centric business model for rooftop solar PV installations in India. We explore areas where potential policy interventions may be introduced to improve collective stakeholder benefits and incentivize more domestic consumers to adopt rooftop solar power generation in their premises. The proposed policy framework optimizes Feed-in Tariff (FiT) rates, PV capacities and Average Billing Rates (ABRs) towards maximizing stakeholder benefits. The stakeholders considered are the consumers/prosumers and the utility. Case studies with three residential prosumers of different demand and generation profiles are presented. The models for utility profit and prosumer savings are developed, and a multi-objective problem is formulated with FiT, generation capacity (as a function of demand) and ABR as decision variables. The pareto-optimal front is identified for prosumer and utility benefits and suitable points with reasonable tradeoffs are selected based on sensitivity analysis of the impact on collective welfare. The suitability of prevailing tariff and FiT rates of two Indian utilities namely, MSEDCL and TATA POWER, Delhi are studied, and their impact on prosumer savings and utility profits is brought out. The workflow to fix tariff, FiT and local PV capacities in active residential distribution systems is devised, providing the policymakers an effective decision-making tool.

Keywords

• Feed-in-Tariff
• Rooftop solar PV
• Policy
• India
• Energy