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“Levelised cost of solar over its entire lifetime is almost at grid parity”

Team Industry 2.0
August 05, 2014

Solar is still not taken seriously as a potential competitor to conventional sources of energy.

SunSwitch India Pvt. Ltd., is a complete service provider of solar energy solutions for commercial, industrial and utility clients across India. The company’s conversion kit converts the customer’s existing inverter/hups battery inverter into solar energy powered intelligent system. In a tête-à-tête, Abhinav Gupta, Founder & CEO of the company, highlights the present trend of the solar power industry to P. K. Chatterjee. Excerpts…

 

 

How is the demand for solar rooftop projects growing in India?

Solar rooftop projects are an item of genuine curiosity in India. The demand is growing at a slow pace in the current financial year, in contrast to its growth in the previous three financial years. MNRE's off-grid capital subsidy scheme is the single most powerful inlfuence for this sector.

A lot of people, especially urban dwellers and commercial organisations are beginning to adopt solar on their rooftops. Some exmaples stand out, like the recent DMRC power purchase agreement with SunEdison. However, overall I would say that the market is in an early adopter stage, wherein people are enquiring but still fence-sitting, waiting for other people to try and see the benefits.

 

What is your comment on the installers' benefits versus costs of such projects?

This question cannot be answered by just a single statement. However, I would say that the installers' benefits vary significantly over the spectrum of energy consumers in terms of what tariffs they pay. The commercial tariffs in states like Delhi and Maharashtra are really high. Most of them are paying in double digits per kWh of energy consumed. These consumers are the tip of the solar market in India, wherein we would not really need any government support and a real and genuine market can exist for this technology.

 

What do you say about the operation and maintenance cost after installation? Also, what is the average life after installation?

Low O&M costs is a genuine plus for solar. Compared to alternate sources of power available to a consumer, like battery backup, DG sets, even electricity board, solar O&M costs do not cross 0.5% of the capital cost invested for a solar rooftop system. That is not to say that solar rooftop systems do not require regular O&M to run it at its optimum capacity, as regular cleaning of the system is highly recommended (with water and soft cloth) to ensure peak generation.

Average life after installation varies greatly with the choice of your products. At our organisation, we generally recommend Tier 1 PV panels to our consumers and recommend them to purchase extended warranties for their solar inverters. Having tier 1 suppliers for the two most crucial components of the system ensures that those warranties shall stand the test of time, so we can comfortably say that the life of the solar rooftop system will be 25 years.

 

Which sectors have got great potential to benefit from adopting solar rooftop projects?

As on date, I can confidently say that commercial organisations (hospitals, schools, office complexes) and heavy consumers of electricity, especially during the daylight hours can draw the biggest benefits from solar rooftop projects. They get three important benefits that will see them enjoying very good returns on their investment.

First benefit is load matching, solar rooftop plants produce at their peak during day time, and more during summer when AC's are turned on. They can claim depreciation benefits, unlike residential consumers. Also, their energy mix improves as they now have a source of power that shall have a constant tariff for 25 years, so reduces their levelised cost of energy.

 

What kind of advantage or financial support can be expected from the governments' sides to install such a project? Do you offer any assistance in that regard?

Government gives a capital subsidy scheme – wherein they offer subsidies. However, due to budget cuts, installers haven't seen any release of those funds. There is a National Clean Energy Fund that is created after taxing coal consumers, however, those funds have not been utilised for the growth of this market.

In spite of the same, the investor community is abuzz with investments in soalr rooftop projects. We provide services wherein we can help the consumer gain access to investor funds. This suits the consumers in India as they do not have to spend a penny upfront to get their own power plant. The idea behind the same is: a consumer wants power and not a power plant, so why make him buy one?

 

How will your 'Integrated Solar+Diesel+Grid Solutions' help people reduce costs?

Solar energy brings a fresh perpective for heavy industrial power consumers. Solar power is abundantly available, and it is at its cheapest right now. Especially the Indian market sees the lowest prices for Panels and inverters in probably the entire world. With our Solar+Grid+Diesel solutions, we are targeting the consumer who is fed up of paying high dieself fuel prices and would like to cut back on those expenses. Levelised cost of solar over its entire lifetime is almost at grid parity, while price of 1 kWh from diesel consumption is about Rs. 20/kWh. So, when we propose these solutions to our clients, we give them an opportunity to cut their diesel consumption to 30 per cent of their existing consumption. These results in huge energy savings for the consumers. Sometimes lesser than two years.

 

What are the still unexplored areas where 'Solar Water Pumping' systems can be installed?

Solar Water Pumpig solutions are being promoted by the Indian government for farmers. It can also be used for community water pumping for villages. Another interesting field that is developing is solar water pumping in remote locations for water treatment plants.

 

What is our (India's) status as on date as far as the existence/ development of a complete solar systems' market cycle is concerned?

As on date, Germany is the leader in this segment. During the summer months, they are meeting more than half of their country’s consumption through power produced through Solar PV. India has a long way to go in that regard. Solar is still not taken seriously as a potential competitor to conventional sources of energy. We are at a very nascent stage in terms of development of solar. To put it in context, more than 60 per cent of the components that are going in to most of the solar PV power plants in India are imported.

 

 

What is your take on solar energy?

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