Rooftop solar has gained prominence as the cheapest even among various solar plant systems. It is also clean, green and the best suited for India.
The prime minister´s enormous ambition of installing 100 GW (or 100,000 MW) of solar power plants by 2022, in seven years straight, up from just 4 GW today, has set the momentum for solar power generation in India.
These days solar power has become a buzzword in India´s power circles. Everywhere you turn, it´s touted as an important solution to India´s energy crisis, with domestic solar seen as being at the forefront of the renewable energy revolution. In the process, it has nudged nuclear power out of the race despite civil nuclear energy being the thrust area of PM Narendra Modi´s initial foreign agenda all through 2014. However, coal remains the mainstay of India´s power sector.
Issues of power shortages in India are making most of the commercial and office establishments to opt for diesel generator backup, which is neither cost-effective nor environment friendly. Besides, 300 million people or a quarter of the country´s population is estimated to have no access to power.
With a target to provide round-the-clock electricity across the country by 2019, PM Modi and his Power Minister Piyush Goyal have put energy on top of the agenda for the country. However, when India announced just ahead of the recent COP21 Climate Conference in Paris that it was aiming to hit 40 per cent of its energy from alternative sources by 2030, it clarified on the direction of thrust of the power sector in the coming one-and-a-half decade - tapping the vast potential of renewable energy sources, with major thrust on solar.
One of the major challenges in solar energy generation is the use of land, particularly to avoid use of arable or functional land. In India, the main focus has been on degraded land and rooftop utilisation. So, much of this expansion is going to be off-grid through stand-alone mechanisms with the solar rooftop plants contributing nearly 40 GW in the next seven years. Going by this target, rooftop solar installations are expected to ramp up from 2 GW in 2015 to 40 GW by 2022.
Concerns over carbon emissions, energy security and the rising prices of fossil fuels, particularly in the light of bitter experience PPAs over the last few years have also tilted the balance in favour of renewable solar power. This is a dream that can be realised by having photovoltaic (PV) panels on the rooftop of every home in India, generating enough power to reduce the country´s massive fuel bill and dependence on fossil fuels. India imports 80 per cent of its fossil fuel requirements.
The Ministry of New and Renewable Energy (MNRE) has entrusted the job of implementation of a large scale grid connected rooftop pilot projects, with 30 per cent subsidy support from National Clean Energy Fund (NCEF), to the Solar Energy Corporation of India (SECI). This programme is being implemented across 16 big and small cities, and projects foh, user benefits without any investmentr around 19 MW have been sanctioned in 3 phases. Out of this, projects of capacity around 14.8 MW have been completed. The 4th phase (of 50 MW) is also under execution. In this phase 13.4 MW have been sanctioned.
The implementation is going to pick up pace with the entry of private players in a big way.
As many as 27 solar cities have been earmarked to undertake efforts to reduce conventional energy and show a greater utilisation of renewable energy.
In these cities, rooftop solar installations will play a major role. At least 13 states in India have already established policies regarding rooftop solar installations. However, those who are in the industry think that implementation of about 20 per cent of the rooftop solar target in the next five years would be an achievement. Sanjeev Aggarwal, CEO & MD, Amplus Solar says, ´Today, installations are between 200-300 MW of capacity in rooftop. If we plan for the next five years properly, between 5-10 GW of rooftop power installation can be achieved.´
Going ahead SECI is expected to have commissioned 1.6 GW solar power capacity through the capital cost subsidy scheme by March 2017, according to a report of MNRE. Additionally, 44 MW of canal-top solar power systems and 50 MW capacity at government-owned buildings and infrastructure is likely to be installed under the purview of SECI. The nodal agency is also likely to add 1 GW of rooftop solar power capacity during this period.PPA
India may also have operational solar power capacity of close to 20 GW by March 2017, if projects under the states´ and central solar power policies go ahead as per the schedule.
Besides subsidies, individuals can take banks loans, which are considered as home loans, and reap tax sops available on home loan interest.
Centre leads the way
An estimated 10.8 GW capacity is expected to be added between April 2016 and March 2017, the MNRE document stated. A huge portion of this capacity is expected to be added through central government policies, while states would continue to play catch-up.The MNRE estimates that around 4.3 GW capacity will be added in financial year 2015-2016, taking the new installations to around 19 GW by March 2017. A total of 9,244 MW solar power capacity is expected to be added under the central government policies, while 1,615 MW capacity is expected to be added under the state solar power policies.
India´s largest power generation company, NTPC Limited, will auction 3 GW solar power capacity under the bundling scheme. NTPC would act like a nodal agency for implementation of these projects. Power from these projects will be bundled with power from coal-based power plants to reduce the effective off-take price. The company has already started these auctions and has also allocated some capacity. An estimated 2.5 GW capacity is expected to be commissioned in 2016-û2017 by project developers participating in these auctions.
NTPC will also add substantial solar power capacity to its own power generation mix. The company may either develop these projects on its own or auction them to other developers, but these projects will be owned by the company itself. NTPC plans to add just over 3 GW capacity through this, and most of the 2.6 GW of that capacity is expected to be commissioned in 2016-2017.
Other central government-owned companies like Coal India Limited, Indian Renewable Energy Development Agency (IREDA), and THDC Limited (formerly Tehri Hydro Development Corporation) are also expected to have 500 MW capacity commissioned. Under the state solar power policies, Telangana is expected to add 500 MW capacity, while Punjab, Karnataka, and Madhya Pradesh are expected to add 300 MW capacity each. Uttar Pradesh is likely to add 215 MW capacity.
MNRE has also asked NTPC h, user benefits without any investment and Power Trading Corporation to auction 1 GW capacity each, through foreign currency equated tariff auctions. Through such auctions, prospective project developers would be able to bid in Euros, US Dollars, and Japanese Yen. About 1 GW capacity from this mode is expected to be commissioned in the next financial year.
The Indian Railways, one of the largest corporations, is also joining this effort and experimenting with solar powered locomotives and stations by using large tracts of land that they own. They hope to alter the energy mix by shifting to solar energy in a big way.
The Delhi Metro is expected to go completely solar using the rooftops of its stations and moving stock, and have a surplus to provide to the central network in this period.
The 3,287,240 sq. km area of India receives solar radiation worth 4,300 quadrillion kcal (5,000 trillion kWh) every year, which is equivalent to 430 trillion kgs of oil equivalent. The daily average solar energy incident over India varies from 3,500 to 6,000 kcal/m2 with about 2,300-3,200 sunshine hours per year, depending upon location. If this natural and in-exhaustible energy is captured then a fraction of it can be useful to meet all heat and electricity needs, according to Solar Thermal Federation of India (STFI). With such a vast potential, the future is bright ahead for solar energy generation in the country.
Low temperature solar thermal systems constitute the major market developed so far, largely led by solar water heaters. As per figures available from MNRE until August 2015, cumulative installed capacity of solar water heaters (mostly rooftop) in India was close to 10 million sq. meters. The focus is now shifting to solar power generation from the same location.
If manufacturing is attracted in India under ´Make in India´ initiative with liberal policies for multinationals, then the target seems doable. Else, it will be foreign suppliers who will harvest maximum profits. Jaideep Malaviya, CEO, Malaviya Solar Energy Consultancy said, ´The vast reservoir of solar radiation of about 4-6 kWh/m2/day for around 300 days in a year makes India the ideal platform to harness solar energy. There will, however, be required liberal approach from utility companies for easier feeding in the grid to make it a workable model.
Power grids in India were set up for a few centralised locations of generation and massive distribution networks to carry that electricity to populous locations. In that process, remote locations such as hilly and forest areas, were ignored. However, with the emergence of rooftop solar, which is a distributed generation system, isolated micro-grids are becoming common place. This development enabled provision of electricity to light up the lives of people living in remote and hilly areas as well.
Rooftop solar plants are set up on rooftops already available for installation, unlike field solar plants, where they have to get land that are scarce and paying through the nose, before installation. Rooftop plants do not require any transmission network, being an independent set-up where generation and consumption takes place. As such, aggregate transmission and commercial losses associated with long transmission networks are not there.
´Besides being a green power, it is cheaper than grid power by 10-25 per cent,´ Kuldeep Jain, Managing Director, CleanMax Enviro Energy Solutions Pvt. Ltd says. But Aggarwal says that the difference could be anywhere between 30-40 per cent compared to grid power, mainly due to lack of AT&C losses in rooftop solar.
When the electricity board buys power from field installations, they are subjected to aggregate technical and commercial (AT&C) losses, which could go up to 30-40 per cent Even if the price of the power the board buys is at Rs.5.20 or Rs.5.30 per unit, by the time of delivery to consumer it goes up to `8, considering the transit losses,-ö explains Aggarwal.
A 2 sq. metre solar collector area can replace an electric heater of 2 kW rated capacity. On an average, it can save around 1,200 kWh of electricity or around 140 liters of diesel/ furnace oil in a year if used for 300 days. Behind every 1 million sq. metre of installed collector area the peak load shaving achieved is 10 GW, according to STFI. With the advancement in technologies over the last few years, the capital investment required for setting up 1 MW of rooftop solar plant has come down from `18-20 crore in 2010-11 to `6 crore now, that is only one-third of the cost. The same is the case with solar power, which is available now at Rs.5-6 per kWh unit from `18 about five years back. But, only rooftop solar power is available bereft of any AT&C losses.
PPA´With rooftop solar, you can be totally independent of the grid, besides there are no T&D issues, no AT&C losses and it can be operated in hilly and remote areas. Simply put, it can do to power supply (household/consumer) what a mobile phone can do to a telephone network,´Aggarwal summed up the advantages of rooftop solar plants. Kuldeep Jain feels that even if somebody invests in a rooftop solar plant, it will pay back the capital in about 5-6 years with a project IRR of 15 per cent.
There are many companies that are offering pay-as-you-use kind of packages, under which the consumer does not incur the cost of installation, he will only pay for the power produced and used. This has several nomenclatures like -æopex deals´ or BOOT model or pay-as-you-go model.
Under the model, the rooftop solar plants are set up entirely at the cost of the installer, which are also maintained by them throughout the project term, which may be for a period of 15-25 years. A power purchase agreement (PPA) is signed fixing the electricity price for the whole tenure, and on expiry of PPA, the plant is transferred free of cost (usually, `1) to the client. Billing is done every month on the basis of actual energy generated by the solar plant, however, the costs/charges will be cheaper than grid cost. These on-site solar power plants are set up on rooftops, as carports, on grounds and on superstructures, integrating them with the client´s existing grid, Aggarwal explains. This model is a great advantage even for people who cannot afford installation costs.
The main challenge for solar power plants is to avoid fertile land. However, that is not a problem for rooftop solar plants, for which waste or unused rooftop is available, either it is in the case of industry or that of individuals.
So, the major problem for the government or any other agency pushing this sector is ensuring open access for those setting up rooftop solar plant. ´The government should ensure that the whole process is smooth. Today the policies and procedures are in support of rooftop and other solar projects. But going forward, discoms and transcos will enter the picture. We have to ensure that those people will not create any problem,-ö says Sanjeev Aggarwal of Amplus.
Development of PV cell and ancillary product manufacturing industry is also critical for unhindered and cost-effective growth of the industry. ´f manufacturing is attracted in India under ´Make in India´ initiative with liberal policies for multinationals, then the target seems doable. Else, it will be foreign suppliers who will harvest maximum profits,´ Jaideep Malaviya pointed out.
Rooftop solar sector is still at a nascent stage, mainly due to its inability to convince many potential clients - industry or individuals - to adopt this technology to save on their power bills. ´It is not just educating them about the advantages of rooftop solar plants, but about various schemes available,´ says Aggarwal.
However, Jain feels that the response was good for their education programmes and that his are more repeat clients than new accretions.
Can sell now
People who have installed solar rooftop photovoltaic (PV) system can now sell power to distribution companies with several state governments allowing selling of solar power after connecting to grid.
´This move is expected to boost solar or green power generation across the states and encourage people to install solar rooftop systems,´ said Malaviya.
While Karnataka was the first state to allow connecting solar power to the grid, states such as Tamil Nadu, Uttar Pradesh, Jharkhand, Chhattisgarh, Kerala, Maharashtra and Madhya Pradesh followed suit early this year.
However, this calls for new meters that can track movement of power in both the directions - into the grid and from the grid -û to be installed, so that one can measure outgoing or incoming power and pay or get paid only for the difference in consumption or supply to grid.
The recently issued Maharashtra Electricity Regulatory Commission (MERC) guidelines state: ´With new meters to be installed, eligible applicants can get credits for their solar power and adjust them against their normal bills for electricity supplied by respective distribution companies anywhere in the state.´
Though the government is pro-active, rooftop solar promotion can be successful only with the participation of individuals and industries in reaping the benefit of clean, green and cheaper power.
State governments should evolve firm policies to ensure that the open grid policy is implemented in letter and spirit. Only then can the intended rapid growth of the industry be achieved in the next seven years as was planned by the Central Government. Financing is the other area where implementation is more important than just laying out policies and procedures. Including rooftop solar in the list of infrastructure industries will help it enjoy several benefits associated with them in terms of finance cost, raising finance through market etc. Though the industry is evolving, at one stage preparing suitable formats for PPAs and incorporating provisions for legal recourse would help smoothen the process and resolving disputes, when they arise.
There are apprehensions that cost conscious nature of our people would lead to proliferation of sub-standard equipment across the rooftops. The government should take appropriate steps to identify the best technologies available and shun others. Though SECI is involved in some of these activities, proper testing facilities and institutional mechanism has to be evolved for ensuring that proper global standards are followed by the service providers.
Given that rooftop solar has more advantages than field-mounted plants, for promotion of the former the government has to undertake awareness programmes, particularly among individuals. Promotion of domestic manufacturing of solar panels and accessories will help creation of employment, and assimilating/imbibing advanced solar power technologies.
Last but not the least, these ambitious targets cannot be achieved without the participation of foreign investors. Creating a congenial environment for their presence and manufacturing would help in the long run.