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Bright future ahead for rooftop solar PV systems market

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With the power crisis in India set to worsen in the near future, the potential for rooftop PV systems is huge. However, given the high upfront cost of these systems, the delays in subsidy disbursal and cheap imports, growth may not be smooth for the solar system providers

By Uma Gupta

solar houseWednesday, August 28, 2013:  State electricity utilities across India are finding it difficult to meet the substantial growth in peak electricity demand. Rooftop solar PV systems offer them an opportunity to reduce energy costs and ensure power continuity in the event of grid unavailability. That is the reason why the use of solar or diesel hybrid rooftop applications is growing rapidly throughout India. However, one cannot accurately quantify the size of the rooftop PV market since it is still in the process of evolving.

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“While many PV solutions for off-grid, rooftop and standalone applications have matured during the last 25 years within the country, the market is awakening to the reality that PV possesses every type of power generation solution, whether modular or flexible. And these are customisable to suit the needs of an individual. In the next few years, PV systems will receive greater acceptance from every market segment due to heightened awareness,” explains Sunil Goel, vice president, Maharishi Solar Technology.

With government subsidies having been announced, mainly by the southern states of Tamil Nadu, Andhra and Kerala, this market will grow faster over the next few years, so long as the subsidy can be realised by the end-user.

A KPMG report states that rooftop power generation potential in India is expected to reach 4 GW by 2016-17. Grid parity could be achieved by 2015-16. Favourable trends for rooftop PV include an increase in power tariffs in many states, transmission and distribution losses of about 20 per cent (which can be avoided by rooftop PV) and the target being achievable, subject to an enabling environment created by regulators and utilities.

PS Deodhar, founder, Mitramax Energy

Rooftop vs multi-megawatt plants and home inverters

According to PS Deodhar, founder, Mitramax Energy, rooftop solar power generation is the best development. Multi-megawatt plants are a rather foolish option, considering that utilities that buy the power waste over 30 per cent of that expensive solar energy during distribution. In addition to that, there are further losses when transformers step up the solar inverter’s 400V output to 66 kV. In the case of the rooftop solar power option, however, users get good quality power during blackouts.

Rooftop solar is also a better option than the home inverters used today. The cost of power from home inverters is twice the cost of power from the utility. The combined efficiency of most of the branded home inverter-charger combinations is below 50 per cent. For 1 kWh of energy from them, home inverters cost the user the equivalent of 2 kWh of energy from the grid. In the case of solar plants, on the other hand, energy is free. Solar energy costings are simply related to the depreciation cost of the plant, as the sun’s energy is absolutely free.

Challenges to growth in this market

The most important problem associated with home solar power is the customer’s ignorance about rooftop solar PV plants. There is scope today for a smooth-talking vendor to sell sub-standard products to gullible customers. Government inspectors, in most cases, share profits with the supplier, so the buyer can’t depend on them. Corruption is rampant wherever there is a question of subsidy. What is the value of a 20-year guarantee for the PV panels given by all sorts of ‘solar manufacturers’, who have recently mushroomed all over India, asks Deodhar.

“Customers should buy from professional companies and not fall for the low prices of unknown vendors. After all, buying a solar PV system makes sense only if it is durable, and is the result of a good design and careful manufacturing,” Deodhar suggests.

There are also some technical aspects about the rooftop solar systems (terrace tops in urban towns) that need attention.

Sunil Goel, vice president, Maharishi Solar
Sunil Goel, vice president, Maharishi Solar

“The rooftop solar systems permitted today are off-grid. Solar power that is mainly used during the day, like at all commercial and industrial locations, needs a battery with only a small storage capacity to take care of night or evening loads. Systems for such customers need to be designed with this aspect in mind, to contain the cost. Some states allow such systems to feed the energy output to the power grid,” explains Deodhar.

“There is a problem associated with grid-tied inverters also. They stop functioning when the grid fails. So, in India, till we find an inverter that keeps on working to feed the local load when the grid supply fails, the grid-tied option is invalid. However, grid-tied options that feed the load are ideal since the unused solar energy from the rooftop PV plant can be then ‘sold’ to the utility, as is done in Europe,” Deodhar adds.

According to Goel, the challenges to growth in the rooftop solar PV market include:

  • Lack of dedicated and experienced stakeholders to deliver quality products as well as optimal solutions
  • There is a need to use good-quality components in a system to ensure optimal performance over the entire expected lifetime of the product/project
  • Lack of awareness amongst users to adopt systems based on the cost of ownership over the product’s entire lifetime, rather than just the initial capital cost of the system/project
  • Proactive and inclusive policies from the government, right down to the local administration to evolve an effective and efficient delivery mechanism to the doorstep of the customers
  • Ratings by approved bodies to encourage good practices and procedures for all I&C (installation and commissioning) activities, post-installation monitoring and analysis of systems’ performance data
  • Third-party audit of installations to verify compliance to standard procedures and good practices

Technologies and equipment

With the availability of feature-rich and more efficient equipment, it is now relatively easy to harness solar power and monitor it remotely from the comfort of one’s desktop. Solar power now has the potential to generate commercial profits through electricity generated from the rooftop installation and fed into the local grid, informs Goel.

Basically, there are eight components of a home solar system: PV solar modules, the maximum power point tracking (MPPT) control that ensures harvesting of maximum energy from the PV panels, its weather-protected mounting structure, weather-proof junction boxes, the battery bank, the battery bank’s electronic protection to ensure long life, a solar inverter and the DC energy meter that tells the user how much solar energy has been used, at any given moment.

System development and installation in India

Everything in a rooftop solar PV system is made in India, except the basic components. But the quality of most of these products is poor. There are only a few reputed Indian manufacturers.

So far, the technology and its solutions have demonstrated their potential in meeting the energy demand. However, as the policies of the central and the state governments as well as the market are still evolving, India has a long way to go before it achieves self-sufficiency.

Installation costs of rooftop PV systems vary widely depending on capacity, location, quality and the brand of the components.

“In the absence of any standardisation and third-party audit of the installations, solution providers are under pressure to be competitive in both the controlled and open market. The market today is going through a vicious ‘learning cycle’ wherein new inexperienced players promise attractive prices for systems that may fail to perform as expected over the next 25 years. However, as with any new market, this too will mature over the next few years,” says Goel.

“Any well-designed rooftop solar system will cost about Rs 125 to 150 per Watt-peak. However, it is not just about the price but choosing the right source. Choosing a supplier only because it is MNRE-approved also doesn’t guarantee good quality, because I have seen that what is approved and what is supplied are often different,” shares Deodhar.

Steps to streamline and standardise solar installations

The MNRE has introduced a system of inducting channel partners after evaluating both the technical as well as the financial strength of the system/solution providers. This is the first step towards introducing an element of accountability regarding the system provider. The MNRE has also defined the benchmark costs of PV installations, based on which subsidy on capital equipment is extended to the user. However, the route to adopting PV systems is far from user-friendly and highly time-consuming, from the point of view of the buyer, informs Goel.

Area: A limiting factor?

In the absence of a solar rooftop policy in the country, whereby one can export electricity into the local distribution network and earn monetary returns, users are yet to consider deploying their vacant terraces as possible sources of income.

Present-day rooftop installations are coming up primarily on the recent wave of capital expenditure reductions leading to the lower cost of generating electricity for captive consumption. The popularity and deployment of such systems is highly dependent on state electricity tariffs and the availability of space for installations.

Opportunities and pitfalls before system providers

According to Goel, as sunlight is available in abundance in India, the opportunities for solar system providers are vast. The pitfalls linked to system providers, users and, ultimately, the whole market are:

  • Cheap, low-quality imports with no warranty or after-sale backup
  • High cost of finance
  • Vandalism and theft of installed arrays, batteries, cables, etc
  • Local social problems such as in the case of telecom towers powered by diesel
  • The slow and time-consuming process of project approval, release of subsidies, etc by state/central government agencies.
  • Poor quality of the grid and erratic breakdowns

To improve the market/operations, Goel suggests:

  • Free training camps for system providers, installers and technicians to impart good international standard practices
  • Free/subsidised participation by stakeholders in general public awareness campaigns, exhibitions, seminars, etc
  • Appointment of approved agencies for carrying out audits of installations periodically and to rate the overall project
  • Periodic interactive meetings between MNRE and the stakeholders to understand the practical obstacles until the market achieves a self-sustainable momentum

A policy discussion paper by Prayas Energy Group argues that a balanced approach to promote rooftop PV systems would be to adopt a national policy of ‘net metering’ to encourage in-situ generation, primarily for self-consumption. Instead of further subsidising rooftop PV systems, tariffs of commercial and high-end residential consumers should be aligned with those of rooftop PV costs, thereby incentivising them to shift to solar or pay higher tariffs. Policies should help create an enabling ecosystem for rooftop PV, and focus on the removal of procedural hurdles and other barriers in order to facilitate the quick adoption and deployment of rooftop PV systems.

Tips for buyers

  • Buyers should ensure that all the components of the home solar power system are provided by the supplier.
  • The use of sealed maintenance-free (SMF) batteries is recommended. When protected against deep discharge and over-charge, their life will be a minimum of three to four years since there is only one charge/discharge each day. Since a heavy load is unlikely to be placed on them, there is no need to use flooded batteries and, hence, there will be no associated maintenance costs. A well-designed home solar system needs no maintenance, except for cleaning the dust from the panels, the same way one would clean a car or bike.
  • Ensure that PV modules are from a reputed source and MNRE-approved. Energy meters will allow the buyer to measure the energy output in a day. A 1000-watt-peak solar plant should give a minimum 3.5 kWh (units) of electrical energy each sunny day. One should get 3.5 units of energy per kWp rating of the system.
  • Ensure that the power inverter’s claimed efficiency is 85 per cent (minimum). Inverters from a good company can be as efficient as 95 per cent or more, but these are expensive. The brand of the inverter is also important. All sorts of cheap Chinese inverter products are being imported. So be cautious.
  • The mounting structure is very important. Ensure that it is made of zinc-plated mild steel rolled sections, which are powder coated. Also ensure that it is structurally well designed to withstand wind speeds of up to 150 km/hour (minimum).

PS Deodhar, founder, Mitramax Energy

Electronics Bazaar, South Asia’s No.1 Electronics B2B magazine

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