Trends and Myths that will Define the Penetration of Solar Power in India
Andrew Hines April 4, 2019 | Tuesday
India has tremendous potential for solar power generation. Despite this, the country often faces a challenge in meeting its energy demands. This makes it imperative for the Indian Government to realize the high potential of solar and cater to the country’s energy requirements. Accordingly, India’s National Solar Mission aims at installing 100 GW of solar capacity by 2022.
Let us look at the current trends, myths, and policies that the Government must consider while planning for greater solar power adoption in the country.
Trends: Rooftop Solar Power in India
The solar sector in India has arrived at an interesting milestone. More than 25GW of solar power capacity has been installed currently in India. However, to meet the Mission’s ambitious goal, it must get past the challenge aspect of target bifurcation. While 40 GW of the total target has been aligned towards rooftop solar installation, the remaining 60 GW capacity is expected to be achieved through utility-scale solar farms. As on date, rooftop solar installation in the country is more decentralized, and accounts for less than 2.5 GW of the total solar capacity installed. Therefore, the Government has a tedious task at hand if it wants to achieve its target based on the current bifurcation.
Interestingly, despite lack of specific initiatives in the solar rooftop sector, this segment witnessed a growth escalation of 75% Y-O-Y in 2018, as per Bridge to India. This development can be attributed to improved project economics, a result of increased grid tariffs and reduced solar prices in India. Also, the increasing awareness of the merits of solar rooftop projects among both, commercial and industrial consumers was another factor that contributed to this development. Since industrial and commercial consumers pay the most for grid electricity, they are also the ones who stand to gain maximum advantage through this alternate source of power generation.
Corporates too, are increasingly taking interest in adopting the build-own-operate model. As per this model, it is the solar developer who is responsible for solar plant investments while the owner only pays per kWh of power generated. This model allows businesses across the country to skip the heavy investment model and instead, purchase solar power at rates below the standard grid tariff. The arrangement is referred to as ‘grid parity’. In India, grid parity has reached industrial and commercial consumers across India.
As India falls under the tropical belt, most parts of the country are suitable for generating solar power. Among them, Tamil Nadu ranks the first in solar rooftop installations. Nevertheless, rooftop projects are well represented across the country. Sadly, this isn’t the scenario with solar farms. Such projects require constant support from the state.
However, the residential market has a different story to tell when it comes to the relevance and adoption of solar power in India. According to Bridge to India, none of the Indian states have achieved grid parity in the residential sector. This is primarily because Indian residential consumers pay less for power in comparison to industrial and commercial consumers. Secondly, small-scale solar installations for residential purposes are not cost-effective for consumers. Therefore, improved project economics and effective government support are much-required for the residential solar market in India to take off.
Myths About Solar Power In India
Most people are of the perception that solar is an expensive source of power. The initial cost may be high, but when considered across a span of 25 years, which is the average life of a solar plant, the investment will seem profitable. This is true particularly for rooftop solar projects as they negate the cost of transmission and losses.
Many also consider solar power as a relatively new technology and are apprehensive about potential performance risks. The fact is that this technology has been around since the early 1950s and has progressed slowly but steadily. Today, solar technology is quite stable and boasts of a long and successful track record. In fact, the technology is more dependable than other sources of power generation and requires relatively low maintenance. Even though solar power generation varies from day to day and from month to month, in the long run, the total power production remains consistent due to the steady amount of sunlight received year after year.
Another misconception is that the use of solar for power generation will only be successful in extremely sunny regions. But the variation in solar power generation depending on geographies is too mild as compared to the perception. In fact, barring the northeastern part of India and parts of the Himalayan belt, solar plants will perform well across all other areas in the country.
Users also avoid adopting solar technology because they look at it as a limited solution for power generation. This is because solar power can be generated only during the day and the storage of surplus power is expensive. This situation holds true for independent solar power plants but when combined with other sources of power in the grid, the solar power fluctuations can be easily absorbed. When the source of power from wind or solar increases, the grid will have to use a combination of tools to balance the power generation from other sources. These include better infrastructure for transmission, a proper mix of power generation from different sources, the use of energy storage batteries, etc.
Policies for Solar Power In India
The Central and State Governments in India, along with the private sector, are recognizing the importance and the potential of solar energy. This is evident from the fact that India is projected to rank 3rd largest market for solar PV in 2018 . However, to achieve the ambitious solar target set by the Central Government, both, the Government and the industrial sector will have to further enhance the framework and possibilities for solar.
The Government must be cognizant of the fact that the solar industry in India requires implementation of standard policies. Net metering, for instance, helps consumers receive a credit on their electricity bill by storing surplus solar power in the grid when it is not required. This helps in balancing the demand-supply mismatch. In short, net metering utilizes the grid as a huge battery for power storage. In the absence of net metering, many rooftop solar plants would require a battery backup to store power and even out the consumption through the day. Even though the cost of batteries is falling gradually, as of now, solar plants may not seem financially attractive if battery costs are calculated.
While net metering is an important aspect of rooftop solar projects, its implementation has been slow. While some states face certain limitations and other arbitrary constraints over implementing net metering policies, others have a cap on the size of the solar project to avail the benefit of this policy. This limits consumers from utilizing their rooftop panels optimally.
Overall, the scope for solar power in India is quite high. From enhancing power supply to facilitating cheaper electricity and from mitigating air pollution to fighting climate challenge, the solar industry has a lot to offer.