Category: Blog

2017 | Why Renewable Energy Evacuations Demands a Decisive Push

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Installing the new renewable capacity has its due share of problems but integrating it with a nascent grid poses a much more formidable challenge.

Up against a staggering renewable energy target of 175 GW by 2022, India has its task cut out. Installing the new capacity has its due share of problems but integrating it with a nascent grid poses a much more formidable challenge. The country’s solar power generation capacity has gone up 32 times in a span of just six years, from 0.5 MW in 2011 to 16 GW now, but the transmission infrastructure is far from prepared to evacuate the kind of solar power being injected into the grid.

With the transmission system failing to keep pace with the increase in solar power generation, the glaring mismatch is bound to put immense pressure on the present transmission infrastructure, a situation which we can ill-afford bearing in mind the high stakes in the solar sector. We still have lessons to learn from India’s worst blackout of 2012, which plunged the entire North India into darkness for two days. Given the sporadic nature of electricity from clean energy sources like solar and wind, there is a need to ensure the transmission infrastructure is capable of handling the sudden surges in electricity during peak hours. With the evacuation system not yet ready, we are witnessing a situation where solar plants are being constrained to restrict generation, which is resulting in huge financial losses to developers.

Though the government has embarked on a $3.5-billion Green Energy Corridors (GEC) programme to overcome these challenges of power evacuation by strengthening the grid network, it is a daunting task which has to be taken up on a war footing to be able to deliver the desired results. The biggest challenge before us is to ensure that transmission systems are in place before the solar projects are ready. Considering that executing transmission projects takes up to five years as compared to 12-18 months for solar projects, we need to act urgently and decisively.

The GEC programme needs further push in order to ensure sufficient thrust from the industry in solar-rich states like Gujarat and Rajasthan. The mismatch between the number of demand centers and the available corridors is also a major concern. For instance, the 1,000-MW substation project at Kaythar in Tamil Nadu, which was scheduled to be commissioned earlier this year, has yet not seen the light of day for the simple reason that independent power producers are more inclined to evacuate the power to Gujarat and Maharashtra rather than the Northeast through the planned corridor. Distance can also be a major issue in India with six states in the western and southern parts accounting for 80% of the country’s installed solar capacity but only 38% of the power demand. The GEC programme is aimed at evacuating power from renewable energy-rich states to other states through 765 kV and 400 kV high-voltage transmission lines.

With storage facilities for solar energy lacking, how we manage the power generated at a specific point presents a stiff challenge. Maintaining grid stability can pose a major problem when a large amount of solar power is injected into the grid. Things can become even more difficult when the share of renewable energy in total power generation goes up in due course of time, but the constant flow of power is still lacking. The situation can, however, be overcome with modern technological breakthroughs and advancements like smart grids and solar energy storage solutions. Since many large solar facilities are in remote locations like deserts where grid infrastructure does not exist, we need to find a viable way to connect to and store solar energy, as and when needed. Bearing this in mind, the three-year action plan formulated by the Ministry of New and Renewable Energy has asked the Solar Energy Corporation of India to focus on storage solutions.

Though there has been considerable progress in coordinating generation and transmission at the state level to ensure sufficient in-state transmission, a lot more remains to be done. States should take it upon themselves to avoid delays in project execution by providing last-mile connectivity between inter-state and intra-state transmission lines, which is part of their responsibility. While the work at the national grid level is making some progress, the inadequate preparedness of states at the distribution grid level is a cause for concern.

Some of the states have even started asking wind and solar power developers to curtail generation in view of the insufficient transmission capacity. As a result, project developers are incurring revenue losses. To counter the situation, the Ministry of New and Renewable Energy has issued an advisory asking state power utilities not to direct renewable energy developers to reduce generation.

The inter-state transmission corridor being developed by Power Grid Corporation of India will help only if the transmission utilities in states supplement the effort by developing and strengthening their transmission infrastructure. Only then can we exploit the renewable energy potential of places like Ladakh and Jaisalmer and meet the growing power requirements of regions with high consumption. On the brighter side, states need not be worried about fulfilling their renewable purchase obligations, considering that the renewable energy costs are expected to decline once the inter-state sale of renewable energy picks up through the green energy corridor. Making the proposition even more viable, they have been exempted from paying the inter-state transmission system charges.

However, the efforts have to be doubled. There is a dire need to have a mechanism in place to ensure coordination between renewable energy generation and transmission at the state level so that there is sufficient in-state transmission. The scheduling and dispatch between states and regions must also be coordinated on priority. The government should come up with regulatory and policy guidelines which optimize cost-effective capacity expansion. In view of the intermittent nature of renewable energy, it is imperative to equip states with state-of-the-art renewable energy forecasting tools.

The Green Energy Corridor needs to be significantly widened so as to accommodate 50 more ultra-mega solar parks, in addition to the 34 under construction. While upgrading the transmission infrastructure to cater to the ever-growing needs of the future, the government should also not lose sight of the fact that the country’s per capita power consumption is projected to grow four times by 2030. These factors call for massive investments in the T&D segment for which private participation is a must. It is time for the policymakers to ensure the power sector is ready for the turnaround.

2017 | Economy of Scale Holds Key to Re Manufacturing

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The renewable energy industry can draw a lot from the government’s flagship ‘Make in India’ campaign to bolster its prospects.

With sustainability being the order of the day, manufacturers across the globe are increasingly developing more and more efficient ways of tapping renewable energy. Aimed at reducing dependence on fossil fuels, this welcome trend is contributing to clean energy competitiveness. Making giant leaps in the renewable energy sector, India, too, is at the heart of this transition.

In 2016-17, the output of renewable power projects went up by 26 percent, making the Indian renewable energy sector the fastest growing in the world. According to the National Resource Defense Council, more than 1 million full-time equivalent jobs will be created by the solar industry alone by 2022. This includes more than 2 lakh engineering jobs and more than half a million jobs in the skilled sector. Wind sector, on the other hand, will help generate 1.9 lakh jobs in the next five years.

The renewable energy industry can draw a lot from the government’s flagship ‘Make in India’ campaign to bolster its prospects. Equipped with high-quality manpower to support the domestic solar and wind manufacturing markets, India has the potential of emerging as a global manufacturing powerhouse catering to all the needs of the renewable energy sector. A future driven by clean and green energy is on top of every country’s sustainability agenda today, and India is no exception. The ambitious target of scaling up clean power production to 175 GW by 2022 will throw up huge opportunities for domestic manufacturers provided they reinvent themselves and innovate as per the demands of the market.

The future of the solar manufacturing business, for instance, will depend on how Indian companies beat the competition through constant innovation, quality improvement and marketing. The market potential for solar panels in India is huge despite the stiff competition from China, mainly in terms of price. To realise this potential, domestic manufacturers should accord top priority to clean energy strategies. The government should complement their efforts by offering them incentives, formulating effective energy and solar skill development policies, setting up more module assessment labs, encouraging R&D and doing away with procedural delays in executing projects.

Despite the immense scope, challenges remain, lack of scale and an underdeveloped supply chain being the major impediments. Flexible incentives and financing options, effective net metering policies and antidumping duties on foreign solar module manufacturers are the need of the hour. To make the Indian solar industry globally competitive, the government should work on a larger policy framework to get domestic manufacturing plans going. Domestic manufacturing can enable India to control the solar supply value chain, fetch more revenue and enhance profitability in the long run. The new policies should address the issues that concern manufacturers, like transport, infrastructure, taxation, labour laws and power outages. The government should take it upon itself to create a skilled workforce by introducing solar manufacturing in the National Skill Development Mission. It should extend support to large-scale projects and fully integrated manufacturing plants under the ‘Make in India’ policies.

It is imperative for India to support the solar manufacturing industry so as to achieve economies of scale and, in turn, lower costs. This way, strategies to drive innovation and promote exports can be in place much in advance, contributing to better appreciation of industry and competitive dynamics. Research institutions can also pitch in to develop industry linkages and support innovation. The government should take a cue from global trends and plan manufacturing bases as integrated solar industrial clusters. Though the country’s manufacturing policy recognises solar manufacturing as an industry of strategic importance, the implementation is lacking.

The fact remains that some of India’s largest solar equipment manufacturers are facing financial losses, priced out by Chinese competitors as the government prioritises cheap power over local manufacturing despite its ‘Make in India’ push. interestingly, prior to the announcement of the National Solar Mission, Indian solar firms were focusing on original equipment manufacturing and exports to Europe, amassing billions of dollars in export revenues between 2008 and 2012. As China came into the picture, module prices began to fall sharply, and Chinese firms were able to capture substantial shares of the global market at the cost of Indian suppliers. Chinese companies have gained the most from the Indian solar boom, accounting for about 85 percent of India’s solar module demand. Modules produced in India generally cost around 10 percent more as compared to the ones from China. The government is trying to correct this imbalance by offering 20-25 percent capital subsidies and other incentives to domestic manufacturers under the “Make in India” campaign, in addition to the Viability Gap Funding (VGF) mechanism and the relaxation under GST, which waives 12 percent countervailing duty and 5 percent VAT on solar components produced domestically.

Going by the government’s capacity targets, the total annual solar module market in India could go up to more than $10 billion in the next few years. This is great news, but since the rush of capital can put tremendous stress on the creaky power infrastructure in India, it becomes imperative for the government and industry to take corrective measures. A ‘reduce, encourage, deregulate’ policy towards power generation can go a long way in supporting the Indian manufacturing industry as a whole with cheap and readily available power. The government, which has grand plans to draw 40% of the country’s energy from renewables by 2030, intends to spend Rs 210 billion ($3.1 billion) on state aid for India’s solar panel manufacturing industry to increase India’s photovoltaic capacity and create an export-oriented industry.

In 2016, India accounted for 5 percent of the world’s renewable-energy capacity and invested $9.7 billion (Rs 64,990 crore) in the sector, according to the Renewables Global Status Report 2017, released by REN 21, an international non-profit working on renewable energy. Direct and indirect jobs in renewables, excluding large hydropower, reached 8.3 million in 2016, with China, Brazil, the United States, India, Japan and Germany being the leading job markets. Jobs continued to shift towards Asian countries, which together accounted for 62 percent of jobs in 2016, as compared to 50 percent in 2013, according to the International Renewable Energy Agency (IRENA), a global intergovernmental organisation.

However, in 2016, local manufacturers struggled in the face of cheap imports. Indian firms accounted for barely 13 percent of supply, according to a 2017 report by IRENA. Domestic manufacturers claim that the high demand for imports is to be blamed for their capacity underutilisation. Alarmed by the situation, the Indian Solar Manufacturers’ Association has asked the Directorate General of Safeguards to consider a safeguard duty on solar cells and modules, according to a report by Bridge to India. But the report did not advocate safeguard duties. There is “little upside to imposition of anti-dumping or safeguard duties on solar cells and modules. There is no evidence from other countries of such duties resulting in any long-lasting benefits for domestic manufacturers. At the same time, any duties raise the risk of sidetracking India’s solar capacity addition target, affecting more than 10,000 MW of project pipeline,” it said.

Another problem plaguing Indian manufacturers is the lack of access to funding to build manufacturing units with private banks reluctant to offer loans at attractive rates. The World Trade Organisation’s ruling that India’s Domestic Content Requirements (DCR) contravened its trade agreement has also affected domestic manufacturers. At the same time, the government has done well by keeping DCR quota for government-based energy development projects. Favorable policies on easy financing, solar park development, long tenure loans, net metering, viability gap funding, mandating solar installations in government buildings and initiatives like the International Solar Alliance and Make in India campaign have definitely helped domestic solar manufacturers, but a lot more remains to be done.

Looking at the positive side, the Indian government is emphatic about supporting domestic manufacturing. In addition to modifying the DCR rules, it is believed to be in the process of releasing a new solar manufacturing policy which will provide companies setting up domestic integrated manufacturing facilities with Viability Gap Funding (VGF), a financial subsidy, to enable them to compete with their global counterparts. The reasoning is that state support is provided to manufacturers to partly compensate them for the high cost of credit in the country and that this policy does not distort trade.

It is clearly very difficult to promote domestic manufacturing in India without solving macro issues like ease of doing business, infrastructure, cost of power, cost of finance and local ecosystem for raw materials. The government has been attempting various initiatives, including DCR and now incentives to support domestic manufacturing. To make India a renewable energy manufacturing hub, the Ministry of New and Renewable Energy has been promoting private investment in renewable energy through an attractive mix of fiscal and financial incentives. The government is also encouraging participation from other countries by allowing 100% foreign direct investment in renewable energy.

The solar cell and module markets overseas have also experienced similar setbacks due to oversupply of products, low margins and drop in cost of raw materials. But the demand for imported solar cells and modules has been significantly higher in India due to more cost effectiveness, better quality and higher efficiency as compared to the domestically manufactured products. The solar inverter industry in India is still at a nascent stage, but it will start coming into its own once the domestic solar module industry is firmly established.

In order to increase the domestic manufacturing capacity and utilisation to levels required to meet annual targets under the National Solar Mission, also envisaged in the ‘Make in India’ plan, DCR of cells and modules was launched for some of the projects undertaken as part of the said Mission. However, none of the policy initiatives at the state level mandated any DCR. Despite this initiative, domestic solar cell manufacturers continued to see sporadic and low levels of utilisation of their manufacturing capacity over the years and most of them recorded losses. They attribute their losses, among other things, to high cost of production and capital expenses, decline in exports and rise in demand for imports.

Falling Solar Tariffs Bring Opportunities Galore, But Present Challenges Too

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Driven by favorable factors like falling module prices, stable exchange rate and lower cost of capital aided by a likely cut in interest rates, the per MW cost for solar is likely to drop by 10-12% this year, but matching timely execution with optimum quality will be a challenge for developers if these factors do not come into play

Falling solar tariffs have certainly buoyed the Indian solar industry, and solar installations are expected to grow at a rapid pace this year. The recent bid of Rs 2.97/KWh for the Rewa mega project has created a new benchmark for the solar sector. With this, solar power in India has already achieved coal parity, something which not many were expecting before 2019.As the tariffs fall further, the demand for solar power will go up, giving the government all the more reason to focus more on solar energy as compared to other energy sources.

We have already crossed 10 GW in terms of cumulative installed solar capacity, and another 8-10 GW is likely to be added this year alone. To achieve the ambitious target of 100 GW by 2022, 15-20GW needs to be added every year. This brings huge opportunities together with some major challenges for solar industry players.

Most of the tenders have an execution period of 12-18 months, so the current tariffs are based on the upcoming installed cost of solar, which in turn depends on three major factors—module prices, cost of capital and exchange rate. While solar module prices are expected to drop by 20% over the next one year, an expected cut in interest rates will lessen the cost of capital. Even the exchange rate is likely to remain stable.

In this scenario, the per MW cost for solar is projected to drop by 10-12% this year. This is a welcome sign for industry players, but it may also put tremendous pressure on them if these factors do not come into play. In case the prices do not go down as expected, matching timely execution with optimum quality will be a challenge for developers.

We expect a lot more tenders for solar power, both in CAPEX and RESCO models, and an increase in demand from the industry. But this rising demand will be accompanied by a strain to reduce prices. The average size of the solar capacity offered in tenders is also increasing, thereby giving developers better bargaining power to push prices down.

Indian solar module manufacturers, especially the smaller players, are finding it hard to compete. Moving forward, it is going to be very difficult for them to reduce prices as much as their Chinese counterparts. This does not augur well for the Make in India campaign. The increase in demand tends to benefit larger module manufacturers more by enabling them to achieve economies of scale and become more competitive.

Cashing in on the fast-growing solar market, many small and medium players have forayed into this sector as developers or EPC companies in the last few years. We have seen that the small developers unable to compete due to falling tariffs are being slowly phased out by larger companies which have better access to capital.  Furthermore, a consolidation is likely to take place where small developers will either be merged with or acquired by larger companies.

When it comes to large projects, EPC companies are also likely to face a similar scenario. On the other hand, the number of small projects (1MW or less) is expected to go up as the demand from the industry picks up, giving smaller companies a chance to be more competitive. The success of smaller and medium EPC players will depend on their ability to compete on three factors—cost, time and quality.

The expectations of reduced costs are rising with falling tariffs. Other than module prices, a reduction in Balance of System (BoS) costs is also expected due to better design of inverters, MMS, foundation, etc. In the current scenario, understanding the real cost of the components and appropriate negotiations are quite challenging for small EPC players. They cannot do without strengthening their procurement and design capabilities.

Timely delivery of projects is another challenge for smaller EPC players. Issues in project management and logistics can result in delay, and developers pass on the heavy penalty to EPC players. It is a challenge for EPC players to standardise the possible equipment specifications with approved and reliable suppliers, but it will help achieve better price, delivery and service support.

Quality is an integral factor when it comes to operating solar power plants for 25 long years, efficiently, economically and reliably. EPC players are under constant pressure to reduce costs and yet deliver optimum quality. Access to skilled manpower with experience in procurement, design and project management is a huge challenge for small and medium EPC players.

With falling solar tariffs, developers will try to generate more energy so as to increase the Internal Rate of Return (IRR) and reduce the level of risk on the investment. In a highly competitive market, offering such guarantees is another huge challenge for any EPC player.

But this is a great time for the Indian consumers—industrial, institutional and residential—to install solar power plants. For industrial consumers, grid parity was achieved in most of the state’s last year and residential consumers are also likely to achieve it by next year, or even this year itself.

The levelized cost of solar electricity for an industrial consumer is now 25% less than the cost of grid power in most states. The savings from solar, combined with accelerated depreciation benefits, have reduced the payback period to less than four years. RESCO model is becoming popular with industrial consumers as they can realise more than 20% savings in their electricity bills without any investment. For residential customers, savings from solar, in addition to 30? pital subsidy, results in a payback of less than five years.

One of the drawbacks of falling tariffs for consumers is the unrealistic expectations they create about the cost of solar installations. The tariff of Rs 2.97/ KWh in Rewa is for a 250-MW project.  Such low tariffs are possible for larger projects and not the ones with a capacity of 10MW or less. Tariffs for smaller projects have come down but not in the same proportion, which customers are finding hard to fathom.

Nevertheless, we are witnessing a heightened interest from our industrial customers. We are also working on a special product specifically for residential consumers as we anticipate a spike in demand from the residential category as well.

2017 | Vast Project Pipeline Govt Impetus Will Propel Solar Power into High-Growth Trajectory Next Year

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The power sector is growing at a rapid pace to cater to the ever-increasing requirements of a fast-developing economy, and it is solar power, which is setting the tone for this unprecedented growth, emerging as the fastest growing energy source in India. With more and more developers pumping in huge money to line up one mega solar power project after another and the government providing the much-needed impetus to achieve the 100-GW target, the solar sector is growing by leaps and bounds. Backed by a project pipeline of more than 20 GW, this upward trend will pick up momentum in 2017.

India’s installed solar capacity recently crossed the 10-GW mark, a milestone that should act as a stimulus for unprecedented capacity additions in years to come. Far exceeding the growth projections of leading market analysts, solar power generation has more than doubled in the past one year, and it will not come as a surprise if the installed capacity records a threefold increase by the end of next year.

In fact, the way things are shaping up, especially in southern states like Telangana, Andhra Pradesh and Karnataka and traditionally well-performing states like Madhya Pradesh and Rajasthan where many big projects are coming up, we may soon see the volumes growing exponentially. No wonder, India is all set to emerge as the world’s third largest solar market next year, after China and USA.

The coming year will also witness the execution of many large solar parks. Encouraged by an enthusiastic response from the private sector to the solar park scheme, the government is planning to double this capacity from 20 GW to 40 GW.

Going by the constantly declining tariffs, which have now touched the Rs 3 per unit mark, we are likely to achieve grid parity in 2017 itself, thus preparing the ground for high-trajectory growth. With costs of solar panels declining steadily and states like Haryana and Telangana coming up with favorable policies, the rooftop segment is also expected to grow phenomenally in 2017. Better implementation of net metering regulations and disbursal of subsidies, coupled by the renewed focus on increasing rooftop solar deployment on government buildings, will give further impetus to rooftop solar across all consumer segments.

As the industry introduces more and more cost-effective solar PV technologies, off-grid solar opportunities are also poised to grow proportionately. But to ensure that the gains are not offset by the introduction of GST, we expect the government to exempt the solar sector from this tax. We also expect the government to make the solar industry more competitive by providing incentives to domestic module manufacturers and setting aside substantial funds for conducting R&D in more efficient and cost-effective solar technologies so as to reduce dependence on imports. A steep hike in import duty should be affected to prevent cheaper modules from flooding Indian markets.

But all the progress on the solar front will come to nought if we do not upgrade our transmission lines in sync with the heavy doses of solar power being injected into the grid. Preparing for the challenge, the government is in the process of setting up special green energy corridors for the smooth evacuation of solar power, which will be one of the major focus areas in 2017 with eight such transmission corridors coming up across the country.

We will see more and more states constantly upgrading the grids and coming up with new ones to match the outflows created by new solar projects, much on the lines of Andhra Pradesh which has a parallel plan on T&D ready for every solar project. The process has already started in states like Telangana, Punjab, Rajasthan and Madhya Pradesh, which are also stepping up efforts to upgrade grid infrastructure. These developments will give a much-needed boost to the solar EPC industry, bringing new opportunities for up-and-coming companies like Hartek Power.

The favorable business environment will translate into cheaper finance options with banks, financial institutions and funding agencies vying to attract investors. Lower financing costs will only add to the financial viability of solar projects, which many still view as a costly business proposition. With India leading the International Solar Alliance from the front, the government is likely to back the initiative by floating special funds for solar energy and introducing financing measures like clean energy fund, generation-based incentive-linked loan repayment and green bonds to facilitate project developers looking for suitable funding avenues. Requiring an investment of at least $100 billion to get to the 100-GW target, India will also step up its efforts to rope in international funding agencies for more capital.

Considering the pace at which solar projects are coming up, operation and maintenance will be another major thrust area for the Indian solar sector in 2017, opening the doorways to new opportunities for solar solution providers like Hartek Power, which specialises in operation and maintenance as part of its integrated services and solutions. After all, solar plants have to last a good 20-25 years, for which their maintenance on a quarterly basis becomes absolutely necessary.

Last but not the least, solar energy will continue to empower the New India by lighting up many more off-grid remote areas with rooftop plants and generating thousands of jobs. Solar energy holds the key to India’s sustainable and long-term growth, and the growth story has just begun.

2016 | Govt Must Act as a Catalyst to Unleash Residential Rooftop Potential

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Chasing astiff 2022 target of 40 GW, India’s rooftop solar industry is finally coming into its own. Registering a phenomenal growth of 113 per cent over the past one year, the country’s rooftop solar capacity recently crossed the 1-GW mark, a milestone that should inspire the industry to give a much-needed impetus to this nascent segment and set the pace for unprecedented capacity additions in years to come. Rooftop solar in India has everything going for it—favorable government policies, streamlined processes, an efficient regulatory mechanism and an investor-friendly business environment. But will it be enough to take us to 40 GW? Not really!  Though leading solar consultancy services provider Bridge to India has projected an installed capacity of just 12.7 GW in 2021, a host of decisive measures can even propel us to the 40-GW mark.

While the commercial and industrial categories are driving much of the growth as of now, accounting for 63 per cent of the installed rooftop solar capacity, it is the hitherto dormant residential market that can really get things moving. The residential category has enormous potential that is simply waiting to be unleashed. Even if half of the estimated 205 million households in India opt for rooftop projects with an average capacity of just 2 KW, we can easily achieve an installed capacity of 20 GWand get halfway through in no time. Once solar systems become more viable, people will start viewing them as necessities. When that happens, there will be no looking back.

The government can act as a catalyst to spur the growth of the industry by coming up with an incentive-based mechanism and formulating effective policies. The rooftop solar segment will be in for a revolutionary change when it becomes mandatory for all residential buildings to install solar PV plants. More and more states should come forward and emulate the example of the Delhi government, which is providing a generation-based incentive or Rs 2 per unit (kWh) to residential consumers over and above the central government capital subsidy of 30 per cent. Easing the process, the Delhi government has also allowed people to call a third-party solar developer to get the solar PV plant installed.

A well thought out net metering policy can also make all the difference by enabling households to save on their electricity bill sand earn from the power they produce. Through net metering, residents can source their supply both from the grid and their solar PV plants. If the supply from one of them stops, the system switches to the other. The meter records power consumption from both the sources and charges the users for the difference. Reverse net metering is also an attractive proposition that enables consumers generating their own electricity through solar power to send the unused or excess electricity generated by their solar plants back to the grid and even get remunerated for it. This mechanism can be a game changer, but sadly, the implementation is lacking.

The major impediments in the way of growth of the residential rooftop category are the prohibitive costs of solar systems, lack of financing options, poor awareness levels and the practical difficulties associated with operation and maintenance, a factor which is dissuading many developers from opting for rooftop despite its immense scope.

While the cost of rooftop solar has been progressively declining at a rate of 12% per annum over the past four years, a typical1-KW solar system without battery costs Rs 65,000-70,000 with 30% subsidy. Since modules account for 60 per cent of the costs of a solar PV plant, the development of cheaper modules, coupled with optimisation of overall costs through competitiveness, economies of scale and integration of technologies, will make rooftop solar financially more attractive to residents. But a greater concern for house owners is lack of low-cost finance. Banks and financial institutions should extend low-interest loans to fund rooftop solar projects so that getting a loan for a solar PV plan becomes as simple as securing one for a car or house.

The lack of awareness also leaves a lot to be desired, explaining why the residential category continues to lag. We have observed during our solar awareness drives in residential areas that only a small fraction of people is aware how rooftop projects can help them save on their power bills and give assured returns. Some people are aware of the 30 per cent subsidy to domestic consumers, but then, they do not know how and where to apply. To bridge this gap, the Ministry of New and Renewable Energy has put in place a centralised facility to enable consumers of all categories, including residential, to apply online for installation of solar rooftops on their premises. Making the process hassle-free, the consumers will be directly approached by service providers.

The lack of skilled manpower for installation and operation and maintenance is another problem area. While the commercial and industrial categories are equipped with enough technical manpower to deal with snags, this is not the case in the residential category, where solution providers seldom have a provision for adequate back-up services. The situation calls for preparing a large technical workforce that is fully trained in the basics of installation, operation and maintenance. The move will also help generate thousands of new jobs. As an alternative for house owners who find the process of installation, operation and maintenance too cumbersome, companies like Hartek Power are planning to come up with portable 1-KW and 2-KW kits which will be as easy as installing a satellite dish.

Since 70% of India still resides in villages, rooftop solar can go a long way in electrifying rural areas as well as remote places which are not connected with the grid. Decentralised cluster power generation can work wonders in scantly populated far-flung villages, where the cost of supplying power through newly laid transmission lines can be prohibitively high. Empowering people by providing electricity to un-electrified areas, rooftop solar has done what the government could not. Lighting up the lives of people who have not known what electricity is, rooftop solar is poised to power a New India.

Grid Manufacturing Missing Link in India’s Solar Chain

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Buoyed by the positive response from the industry and the proactive approach adopted by various state governments, India is now making rapid strides in the solar segment. The country’s solar power generation has gone up 14 times in a span of just five years from 0.5 MW in 2011 to 7 GW now. As a result, the revised solar target of 100 GW by 2022 looks distinctly achievable. In an ideal situation, this shift to renewable energy should provide a ready answer to the power woes of the country, which is blessed with abundant sunshine throughout the year, but the situation in India is not so ideal because the transmission system is not growing in sync with the increase in solar power generation.

If left unaddressed, this yawning gap could leave us with a lot of catching up to do later, putting immense pressure on the existing transmission lines, eventually leading to system collapse. The fact remains that our transmission lines are not geared up to receive the kind of solar power being injected into the grid. Given the high stakes in the solar sector, we cannot afford to have breakdowns.

As the first and foremost step, we should upgrade our transmission and distribution lines. The way the solar sector is growing, it becomes imperative for every state which has jumped on to the solar bandwagon to upgrade its T&D system accordingly. The failure to do so may create a difficult situation, in which states like Punjab find themselves today. Having gone into a solar overdrive, Punjab is now well on its way to achieving an installed solar capacity of 1GW by the end of this financial year. But the T&D system in the state has not been upgraded adequately to withstand this additional load of electricity. While the Power Grid Corporation of India Ltd has been asked to build separate transmission lines to evacuate green energy, it is expected to build only inter-state transmission lines, at least in the initial stages. Within the states, the local governments have to invest in capacities.

Lack of an efficient and reliable T&D infrastructure is one of the biggest obstacles in the way of realising India’s solar potential. Our existing transmission capacities are grossly inadequate. Millions of kilowatt hours of electricity are lost due to inter-state transmission congestion. High T&D losses make solar power generation a highly unviable proposition. Though the government, in association with the NTPC and the Power Grid Corporation of India Ltd, is focusing on upgrading its substations and T&D lines to reduce T&D losses, this needs to be done on a war footing. The situation calls for urgent corrective action. We cannot afford to operate with the same network of poles and wires.

The answer lies in constantly upgrading the grids and coming up with new ones to match the outflows created by new solar projects. The example of Andhra Pradesh is worth emulating here. Whenever the Andhra Pradesh government comes up with a plan to set up new solar projects, it has a parallel plan on T&D ready. Let’s enable the utilities to acquire the financial firepower to invest heavily in grid infrastructure and make large-scale green electricity purchases.

India needs to gradually upgrade its grid ring system from 440 KV to 765 KV to 1,200 KV so that maximum power can be transferred to the central ring and suitably distributed among power-deficient areas of the country. The upgrade from 66 KV to 132, 220 and 440 KV should take place simultaneously. At the end of the day, each unit generated must reach its rightful destination. If we cannot achieve this one thing, the entire purpose will get defeated.