India has around 330 sunny days making it an ideal country for solar energy
In a welcome development for the rooftop solar (RTS) industry in India, the rate to install a 1 kW rooftop solar plant in the residential sector has come down to Rs.22,000. Presently, procuring electricity from a state DISCOM (distribution company) costs approximately Rs.8 per unit of power consumed. Installing a rooftop solar plant on your building drastically brings down the cost of electricity by a large margin.
The investment in a RTS project depends on the business model based on which a project is implemented. The RTS installation can be procured via an OPEX (operational expenditure) model or a CAPEX (capital expenditure) model. An RTS plant installed via the OPEX or RESCO (Renewable Energy Service Company) model will involve a rooftop solar developer owning and operating a RTS plant on your rooftop for a specific time period as defined by a power purchase agreement (PPA) between the developer and the consumer. The consumer then procures power from this RTS plant at a nominal tariff paid to the developer, as agreed upon in the PPA. This tariff is markedly less than the cost of electricity procured from a state owned DISCOM. In the CAPEX model, the consumer buys and owns the plant through a one-time investment. The cost of electricity is null and void in this case and the initial investment on the plant can be recovered over a short period of time. To add to the benefits of a rooftop solar installation is a concept called net metering and gross metering. Net metering is a service wherein excess electricity generated by the RTS plant can be pumped back into the region’s electricity grid and the equivalent cost for this will be deducted from the consumer’s electricity bill.
According to tenders floated by the Punjab State Power Corporation Limited (PSPCL) recently, the cost for installation of RTS systems (inclusive of state government subsidies) amounted to approximately Rs.37,000/kW. The Ministry of New and Renewable Energy (MNRE) and Government of India (GoI) had established subsidy schemes for residential RTS installations. As per this scheme, an added 40% subsidy will be provided for RTS installations of up to 3 kW and 20% subsidies will be provided for installations between 3 kW to 10 kW. With all these developments combined, the installation cost for RTS plants in Punjab has come down to Rs.22,000, which is the lowest in India till date. These subsidies are applicable only to residential rooftops in India.
A 1 kW RTS installation usually costs around one lakh rupees and includes a battery, inverter and solar panels. The intermittent nature of solar energy can be compensated by procuring energy from the grid as and when required. However, advancements in battery storage technology may make storing excess solar power for later use more feasible in the coming years, thus reducing dependence on the grid.
According to industry leaders such as Cleanmax, the rooftop solar industry in India is seeing almost 100% year on year growth, with the commercial and industrial (C&I) sector ruling the roost. This can be owed to various factors, the main one being the immense potential for solar energy in India combined with the price of power procured from the grid. Also, in utility scale projects, developers are facing various issues like land allocation, change in instituted tariffs by state and central governments mid-project, transmission issues and so on.
The fact that India has 330 days of sunshine per year makes India the suns most favored countries. Thus, with more efficient battery storage technology and stringent policies, solar energy can emerge as a significant energy source in the country in the coming years. This can also solve various issues from climate change and air pollution to energy scarcity and energy security.
Image by teresa cotrim from Pixabay
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