Fit solar into electricity

Think of roof, and you see solar panels. Think of solar, and you see the energy generated during the day, powering appliances and even feeding into the grid, from which it can be bought back at night when the sun is not shining. It’s the world’s most uber solution, where each of us becomes a generator of electricity. It also works because solar is modular—the panels can fit almost anywhere, unlike thermal or nuclear generators. While building utility-scale solar plants requires vast amounts of land, which is always scarce and often contested, in this model every available roof becomes a power plant.

You may ask why I am expounding on the well-known advantages of rooftop solar. I believe the potential is enormous. Why, then, is progress still not at a transformative scale despite the Indian government’s programmes to incentivise rooftop solar in offices and homes? It is not the lack of policy or intent. The real question is how this technology will integrate with existing electricity distribution systems.

The challenge is not unique to India. All new technologies follow a similar path: they must find ways to displace the old to secure their place in the sun—in this case, quite literally. The fact is that solar technology, because it is intermittent and provides electricity only when the sun shines, requires some form of backup. Remember that night-time energy consumption is often as high as, or even higher than, daytime usage when natural light is available and there is typically less need for heating or cooling.

The ideal arrangement is that solar panels generate electricity during the day, part of which is consumed on-site, while the excess is either “exported” to the grid or stored in batteries, which are then tapped for use during non-sun hours. Since batteries are still expensive, exporting to the grid remains the most practical option. In this setup, the distribution company (discom) or power utility serves as the backup.

This is where the going gets tough. Take the case of Kerala, which has been running one of India’s most successful rooftop solar projects. The state has installed rooftop systems aggregating to 1.5 GW—reaching some 2 per cent of its roughly 10 million household customers. But in August 2025, the Kerala State Electricity Board (KSEB), which implements the programme, said that its financial losses had become unsustainable.

The problem was that KSEB was buying power from rooftop generators during the day, when rates were low, and selling an equivalent amount back to them at night, when the cost of electricity it purchased was high. With only 2 per cent of consumers served through this solar programme, the burden on electricity rates increased, which in turn raised the bills for the remaining consumers. So, KSEB issued a draft order, which would cap net-metering capacity, put a levy on grid charges and introduce tariffs based on time-of-day calculation. Just as soon as this order came out, the rooftop programme stalled; within a month, installations had fallen by half.

In early November, the Kerala State Electricity Regulatory Commission (KSERC) issued the final notification for grid-connected rooftop systems. It attempts to reduce the burden on the distribution company by mandating new connected households to install battery storage, so that their night-time power purchases are reduced. Rooftop solar systems above 10kW would need to have 10 per cent battery storage and those between 15-20 kW would require 20 per cent. After 2027, even smaller 5 kW systems would require storage. The policy also introduces incentives through a gross metering mechanism, offering higher tariffs to customers who supply solar power during peak hours.

Customer bills would be settled at the end of each financial year. After deductions for fixed and grid charges, any “surplus or banked units” would be paid at R3.08 per kWh for existing customers and R2.79 per kWh for new connections — much lower than peak electricity rates.

The question now is whether this system will work better for rooftop solar producers and distribution companies. Or can there be ways to build solar futures without relying on the distribution route, particularly in countries and regions that lack a grid today?

For instance, news coming out of neighbouring Pakistan suggests a different pathway for rooftop solar. The country faces cripplingly high energy costs because of power shortages. It has however, removed import duty on Chinese solar panels and lithium batteries. International energy analysts estimate that by 2024, Pakistan had installed 25 GW of net-metered distributed solar, compared with roughly 50 GW of installed grid power. It also imported 1.25 GW of lithium batteries to support off-grid systems. If this pace continues, Pakistan could meet 100 per cent of its daytime electricity demand and 25 per cent of its night-time demand through solar by 2030. But reports indicate that this rapid transition is adding to costs of the electricity distribution company, prompting pushback and a policy review. It is not clear where this will go.  

This is the central energy question of our age: how will new energy systems displace, replace or retrofit the existing fossil-fuel-based grid, and what must we do differently? It is a question that we all must watch closely.