The secret to India's success on rooftop solar PPPs? Satisfying stakeholders' needs

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When our team at IFC got the mandate in 2010 for a PPP to set up a 5MW grid connected solar rooftop (SRT) in Gandhinagar (Gujarat, India), some thought that the project was too small to make a difference. In fairness, it would have required a true visionary to fully grasp the potential of grid connected solar rooftops, because not even a 1MW SRT was installed at that time in India, and the challenges – from the practical to the political – seemed insurmountable.
 
Once implementation started, the enormous potential for SRT replication convinced us that this was a project worthy of our most rigorous efforts.  One by one, we were able to address the practical problems and navigate the political issues. It soon became clear that our relationships with stakeholders, however, demanded ongoing attention, management, and care, and so our team reorganized to ensure that we could satisfy the needs of multiple stakeholders whose participation in the project would help determine its success.
 
Grid connected solar rooftop PPPs call upon the resources and expertise of many.  In our case, the very diverse group of stakeholders included rooftop owners, government officials, regulators, distribution companies (discoms), and investors.  We made a concerted effort to understand the concerns of each group, and created strategies to address each of the points they focused on.  At the same time, we planned ahead to anticipate and prevent any roadblocks. 
 
Approaching this PPP with an emphasis on stakeholder concerns – with the stakeholders fully aware that individuals on our end were ready to work together proactively at any time -- helped guarantee the core of the PPP remained intact.  When stakeholders did bring up issues, it never threatened to derail the project; our mechanism for dealing with these stakeholder concerns steered us forward.
 
Our experience with stakeholders and our approach to working with them throughout the lifecycle of the SRT PPP was unique, but all PPP projects face moments in which stakeholder “management” seems unmanageable.  In the hope that these examples will help others engaged in the PPP implementation process, I have outlined below the groups of stakeholders we worked with and how our relationships, which required creativity in the service of problem-solving, helped assure the success of the project. You can find more detail about solar rooftop PPPs in India and the focus on stakeholders in the new edition of Partnerships IQ: Rooftop Solar Public-Private Partnerships in India.
  • Rooftop owners. These stakeholders were critical to the PPP because they would be providing rooftops fit for the SRT on a long term basis.It was a priority to talk to them to understand their concerns and identify which incentives would convince them to offer their rooftops to the project.To prepare for this, our team conducted city wide surveys, used satellite images, created an inventory, and developed a generation-based rental system to spur participation by rooftop owners. Our team also facilitated a wide-ranging communication campaign to call on rooftop owners to come forward and facilitate their participation.
  • Discoms.  The first reaction of this group was negative, as they questioned 1) Why they should support this and offtake power, as 2) they felt the project was too cumbersome and had no major advantage. We turned this situation around by educating them through workshops and explained the advantages of savings in T&D losses and meeting regulatory requirements.  Ultimately, we showed them the benefits of participating in an innovative government program with tremendous visible benefits to citizens.  In the end, this group agreed to purchase power at rates not exceeding feed in tariff and agreed to provide grid interconnection.
  • Government.  Our team understood government concerns and priorities from the start because of our work on other PPPs in the region.  To address their apprehensions, we structured and secured a framework of incentives from the government.  This framework included a guarantee that 80% of public rooftops in Gandhinagar would be included, with single window clearance for all public roofs.  It also involved a commitment to give generation based incentives in case quoted tariff exceeds the feed in tariff.  Above all, our work with the government stakeholders was effective because we assured the potential bidders/investors that there would be help from the government in securing access to rooftops.
  • Regulators.  Initially, there was no specific regulatory framework for SRT. We consistently consulted with regulators and got their approval on the project and bid structure as well as specific feed in tariff. 
  • Investors.  Our team met and spoke to over 50 investors/developers.  Their main concern was getting assistance in securing rooftops and payment security from discoms.  We helped solve this problem by creating bankable PPA and GBI scheme as well as guaranteeing that 80% of rooftops would be secured on public building in the Gandhinagar project. Another important factor in our work with investors was that that this project was considered adequate size (5 MW in Gandhinagar and 4-5 MW in Vadoadara).
Our close attention to stakeholders’ concerns served the project well. Today, about 230 MW of SRT has been installed in India, and the number continues to grow. Indeed, this progress will help India meet its goal of 40GW installed by 2022. Another important measure of success is that other countries are examining the project in order to replicate it; some of the most promising SRT PPPs could take place next in the Maldives, Sri Lanka, Bangladesh, and Thailand. We truly believe imitation is the sincerest form of flattery, and are pleased if others can learn from our approach to stakeholder management.
 

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Shakeel Abro
October 23, 2015

I want to know more on this project.can you send me more detailed information.

Mike Moriarty
October 10, 2015

Hi there. My name is Mike Moriarty and I am from South Africa. I'd like to know more about this. Can you please email me at [email protected]? Many thanks

Syed Khursheed Zaidi
December 18, 2015

Hi Pankaj,
Pleasure going through your article. May I request you to provide me the project number or RRP to read more about the project.
kind regards
Syed

N Kalidas, INSWAREB, Visakhapatnam
December 18, 2015

To make success of SRT in individual households (IHH), present set up in India does not help since IHH are not getting depreciation benefit as well as subsidy because of hassles associated. With more than 25 years of payback, it does not enthuse IHHs. Reduction of 2% interest is greater than offering 15% subsidy on SRT cost.
Hence our Institute has conceived BOT (Build-Operate-Transfer) scheme where corporate do work as SRT-Promoters (SRTP) for installing SRTs. SRTPs should have access to International (institutional) funds at 4% interest or less. As corporate they deserve to draw depreciation benefit. Because of these factors, the payback comes to 6-years. Enjoying 4 years of profit, SRTPs transfer the ownership of SRT to IHH by 11th years. Thus IHH, by investing 20% of SRT cost as commitment fee, becomes owner without additional payment.
This would create intense competition for acquiring business among various SRTPs by which IHH do get good product as well as services.
Our estimate is, once BOT is facilitated, at least 10 million IHHs could be tapped, each with 3 kWp capacity, in next 5 years, generating business of Rs. 3 trillions. It is desirable that World Bank should study the scheme and implement in India for quick success of the program. We can make available the full-fledged scheme with all calculations and rationalities.
N Kalidas, Director, INSWAREB, Visakhaaptnam, India
Phone: +91-891-2516411; Mobile: +91-9848191453; mail: [email protected].

N Kalidas, INSWAREB, Visakhapatnam
December 18, 2015

I have submitted BOT (Build-Operate-Transfer) scheme to World Bank for making SRT a grand success in India.

Dominic Alekeh NGWESSE
December 21, 2015

I will like to find out any opportunity for us to benefit from your Solar Energy because, we are trying to operate a solar oven project in Nguti, South West Region of Cameroon and have lots of challenges during the rainy season when there is no sun shine. We also need to expand the project with more ovens in the Banyang-Mbo Wildlife Sanctuary Area and the Bakossi National Park as incentives to Conservation by locals.
Kindly help us to links and funding opportunities as well as partners who can help.
Thanks