India increased the subsidy for fitting rooftop solar power systems eightfold to 50 billion rupees ($753 million) in a bid to expand installations by a similar amount by 2020.
Commercial and non-state entities won’t be eligible for the subsidy as they receive other benefits, such as accelerated depreciation, customs- and excise-duty concessions, the government said in a statement after a cabinet decision. The program seeks to boost installations to 4.2 GW by March 31, 2020.
The higher subsidy is sufficient to fund only about half the installation target, said Vinay Rustagi, managing director at solar-research consultant Bridge to India.
“Unfortunately, this is not a great use of tax payer’s money,” he said in an e-mail. “There are many impediments to the growth of this market from a policy, financial and operational perspective.”
India’s installed rooftop capacity is 525 MW as of October, according to Bridge to India.
India plans to install 100 GW of solar capacity by 2022, of which 40 GW is expected to come from rooftop systems, inclusive of the subsidized fittings.
©2015 Bloomberg News
Lead image: Solar panels on roof. Credit: Shutterstock.