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Feasibility of Utility and Rooftop Scale PV Plants in India

11th October 2017  

Utility scale solar powered plants

In the recent years utility scale power plants have seen a major boost in India. India currently boasts close to 13 GW of power from utility scale solar energy plants. The western states of India are blessed with adequate solar radiation compared to the other states. Hence, such states form a prime spot for installing large scale solar power plants or utility scale solar power plants. With governments push to set up atleast 50 solar park of (minimum) capacity of 500 MW, utility scaled solar power plants shall be set up within all the states in India. These plants can promptly fulfil Renewable Purchase Obligation (RPO) of the utilities while powering the grid with clean and green energy. Further this shall also enable the country to meet its target of 60 GW by 2022.

The trend in solar prices has been adventitious. The tumbling down prices from INR 13/kWh (Figure 1) to as low has INR 2.44/kWh in mere 6 years has been staggering. This change is attributed to the attractive policies and enabling regulations from the government. Additionally the intense competition in reverse auction with reduced borrowing rates, drastic reduction in prices of (Chinese) solar module has been key factors (to name a few) in this price development.Figure 2 below presents a tentative breakup of utility scale solar power plants. It is clear that while there is reduction in module cost, it would take a major chunk of while setting up a power plant.

Solar Rooftop
Figure 1: Recent trends of Utility scale solar energy price (Source: Mercom Capital Group)

The utility scale plants are installed at places where abundant land is available. However, not always are these plants near the load centres. Hence it is important to wheel such energy generated to the load centres. If such load centres are not under the same Distribution Company (Discom), the energy generated should be wheeled by Open Access (OA). OA was first introduced in the Electricity Act, 2003 which allowed customer with load of more than 1 MW to source their power from any generator of their choice. The framework of OA also permits the solar generator to sell their energy to any consumer (other than Discom) of their choice. This mechanism would help the high tariff paying consumers to source the power at a lower rate. It would also enable the solar energy generator to sell their energy at a remunerative rate. However the Discom loses their business as both the generator and consumer leaves the grid (while still paying charges applicable to OA consumer). While there is such attractive option available, the sentiment towards open access solar capacity remains almost unchanged. This is primarily because of denial to OA by Discom citing vague reasons. This is evident from the abundant petition request pending with the central/state regulator.

Rooftop Solar
Figure 2: Tentative cost breakup for utility scale plant

The current consulting paper from Ministry of Power further shows their orientation towards the financially stranded Discom neglecting the consumers. While there are schemes like UDAY which are inclined towards reducing the financial stress on Discom, it is suggested that this stress should not be passed to the consumers/generators. Additionally it is suggested that the regulator allow the smooth functioning of such mechanisms which would encourage the load centres to go green which enable increased installation of utility scale solar power plants.

Rooftop Solar Power Plants

The recent developments in solar energy market have led to reduction in prices of utility scale solar power plants to INR 2.44 /kWhwhich is lower than the price of coal powered plant. However such utility scale power plants require huge chunk of land which comes at a hefty price. Additionally, connecting this power to the grid required adequate infrastructure which comes with a cost. The cost of land and infrastructure could be forgone if we adopt and implement Rooftop solar power plants.

Rooftop power plants are simple yet an effective method where the incoming grid connection (to consumer's house) is used to feed the excess energy back into the grid. The available roof's space of the consumer is used and the system lands free to the consumer after a period of 7 years (may wary location wise) with only a little maintenance cost (during the lifetime of plant). The consumer may also incorporate storage in their system which can store excess energy and utilize it when there is power shortage.

The rooftop market in India is yet to see the bright side of the day. With close to 1.35 GW of rooftop capacity installed in India, the target of 40 GW till 2022 shall require swift uptake. A typical rooftop consumer banks upon government subsidies to realize the viability of the system. The central government provides an upfront subsidy as Central Financial Assistance (CFA) of 30% of the total system cost. The subsidy from the state government however, varies between states.There are subsidies available from both state and central government in Gujarat.

Figure below shows the variation in cost of Rooftop solar system and maximum subsidy which can be availed by a consumer. However, these subsidies are made available only once the plant is commissioned. The initial investment (including the subsidy) has to be borne by the consumer.However, the time taken to obtain the subsidy (both from central and state government) is cumbersome. The consumer has to wait for a long time (as long as a year in some cases) till he receives such subsidy. This renders the reliability of the entire process and defies the basic purpose of cost realization of consumer by subsidizing them.

Solar Rooftop for home Solar Energy

Figure 3: Subsidy available for rooftop power plant

A simpler method to boost the uptake of solar rooftop plants needs to be adopted. A methodology similar to LPG gas i.e. to credit the subsidy directly to the beneficiary's account may be adopted. This would enable the consumer to avail the subsidy directly shall act as a significant time saving tool. It shall also enable increased consumer trust in the government mechanism and result in swift uptake of rooftop plants.

It is prominent from the recent developments that the current cost of energy from utility scale plants (appx. INR 3.50/kWh) is lowercompared to rooftop solar power plants (appx. INR 4.50/kWh). However, it is a lesser known fact that the energy generated is required to be wheeled at the load centres where there is actually such demand. However wheeling such enormous amount of energy produced would cost the government/developer. Additionally, scheduling this energy and the transmission and distribution losses would also add to the cost of generation. All this would be minimized in rooftop solar power plants. Additionally it would also enable the consumers to be prosumers (producer + consumer) and have a rebate/ reduction in their energy bills.

Waaree Energies has been named one of the leading Project developers, EPC contractors and Equipment manufacturers by Bridge to India (Indian Solar Compass-2017). Waaree Energies currently boasts it module manufacturing capacity at 550 MW and intends to further ramp it up to 1.2 GW by December 2017. We deliver turnkey solutions for both Rooftop scale and Utility scale power plants. Being a module manufacturer, waaree has special upper hand on the performance of modules in such roof top projects. Waaree has very special credentials in the rooftop projects. Currently Waaree is executing very special project at all BAPS temples across the Gujarat and making all temples as Green Temples.

Solar power
Figure 4: Rooftop (left) and Utility (right) scaled power plant installed by Waaree Energies

Let us commit ourselves towards sustainable and clean energy.


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