In two years solar energy for residential sector would be cheaper than electricity grid

In the next two years, solar power will be cheaper than the electricity grid in the residential sector, says solar energy provider SunSource Energy which on Monday successfully implemented the first two phases of a 100 MW solar project in South East Asia.

Stating that while the solar energy in India has already reached 'grid parity' in commercial, industrial and utility sectors, soon this would be achieved in residential sector as well.

The grid parity happens when the cost of the electricity produced by an alternative source -- solar in this case -- becomes lesser or almost equal to that being supplied from the conventional source e.g coal.

At present, India has installed capacity of 327 GW (One GW is equal to 1000 MW), of which about 40 GW is Solar (12 GW) and Wind energy (27 GW) combined. About 70 per cent of power comes from coal-based power plants and the remaining from hydro and other sources like biogas. 

"Solar energy in India has already reached grid parity in the commercial, industrial and utility sectors. In most scenarios, in the next two years solar power would be cheaper than the electricity grid in the residential sector as well," said Adarsh Das, Co-Founder and CEO SunSource Energy.

The solar company has designed and built over 100 solar projects across 18 states in India, with a focus on decentralised power projects. It is currently involved in nearly over 150 MW of solar projects in India and overseas.

Its rooftop projects include the India Habitat Centre.

"Aligning with Prime Minister Narendra Modi's target of 100 GW by 2022, including 40 GW from rooftop and decentralised projects, we are focused on developing, designing and building 400 MW of decentralised solar projects by 2022," said Kushagra Nandan, Co-Founder of SunSource Energy.

Scotland sets renewable energy record as wind power provides equivalent of 118% of nation's electricity

Wind power output in Scotland has helped set a new record for the first half of the year, according to an independent conservation group.

Analysis by WWF Scotland of data provided by WeatherEnergy found wind turbines provided around 1,039,001MWh of electricity to the National Grid during June.

Renewable energy figures show the power generated last month was enough to supply the electrical needs equivalent to 118 per cent of Scottish households or nearly three million homes.

In the first six months of 2017 enough power was generated to supply more than all of Scotland’s national demand for six days.

Turbines provided 6,634,585MWh of electricity to the National Grid, which analysts say could on average supply the electrical needs of 124 per cent of Scottish households, or more than three million homes.

Dr Sam Gardner, acting director of WWF Scotland, said: “The first six months of 2017 have certainly been incredible for renewables, with wind turbines alone helping to ensure millions of tonnes of climate-damaging carbon emissions were avoided.

“Scotland is continuing to break records on renewable electricity, attracting investment, creating jobs and tackling climate change.

“If we want to reap the same rewards in the transport and heating sectors, we need the Scottish government to put in place strong policies on energy efficiency and transport in the forthcoming Climate Change Bill.

“That’s why we’re calling on people to act for our future and tell the First Minister they want a strong climate bill that will deliver a fairer and healthier low carbon Scotland.”

The figures for January to June this year showed an increase of 24 per cent compared to 2015, when wind energy provided 5,359,995MWh.

Scotland’s total electricity consumption including homes, business and industry for first six months was 11,689,385MWh.

Renewables experts say this means wind generated the equivalent of 57 per cent of Scotland’s entire electricity needs.

Karen Robinson, of WeatherEnergy, said: “It’s great to see this data confirm that Scotland is knocking it out of the park on wind power with total output for June in particular up on the same period compared to the past two years.

“There’s no doubt renewables are helping households increasingly avoid fossil fuels for their electricity needs.”

Scotland’s energy minister Paul Wheelhouse said: “It’s great to hear renewable electricity generation in Scotland has reached a new record high. In the first quarter of this year, generation was up by 13 per cent compared to the same period last year, there was also a 16 per cent increase in capacity, and more than half of all gross electricity consumption in Scotland continues to come from renewables.

“Scotland’s total installed renewable capacity, that’s the amount of renewable electricity we are capable of producing, now stands at 9.3 GW – four times what it was only a decade ago. These statistics reinforce our country’s reputation as a renewable energy powerhouse and are a vindication of the Scottish government’s energy policy.”

Solar energy heating up new firms in Pune

Solar Energy has emerged high on the horizon as the next big thing to change the way we spew carbon. Safe, free and all there to harvest. While the past was riddled with several constraints in terms of cost of photo voltaic panels, things have changed now. Not only are these PV panels cheaper to manufacture they have also become more efficient (they now harvest from 16 to 21.5 percentage of solar power)

Add to this the Government’s pro-solar policies and solar makes a lot of business sense. As it did to Swati Bhagwat of Bhagwat Energy.

“Earlier my husband used to manufacture solar water heaters. But three years ago we saw the opportunities that solar power presented and decided to venture into that. We set up our first project of 40 MW in Mumbai only recently.”

Though there are a lot of players who have entered the field, setting up a solar company is not as it seems. Says Shivhar Mendkule of Saururja, “the biggest issues we had to tackle was the Government registrations and approvals. They have different practices and it makes things difficult for a start up or actually, anybody.”

For Sunshot it was lack of experience. Says Rahul Dasari one of the founding members, “When we started, our major problem was that none of us had any prior experience in this field. And of course not much capital. So we did what we could do best in the given circumstances. We read up as much as possible in the field of renewable energy. Then we picked up small consultancies. These paid us very poorly; in fact they didn’t even cover the cost, but we still did them. It helped us gain the all important experience that we were looking for. We did about eight to 12 such consulting jobs.”

For Bhagwat the reverse was true. They started out with solar water heating systems and then slowly grew to Photo Voltaic (PV) panels. Says Swati, “Our business has grown with the changing scenarios. First we would supply solar heaters that the government had made mandatory for all new buildings. With that we had established relations with the local builders. Then came solar energy but since that was dependant on batteries that made projects unviable, things did not work out. Now, the government has introduced this net metering system where you can pass on the power you generate onto the grid, we saw opportunity and set up our own PV manufacturing plant in addition to doing installations.”

Solar Energy is a capital intensive initiative. To set up a solar plant one needs to invest heavily and that can be seen as an obstacle to many businesses. “But” says Rahul, “that is not really true. Let me explain. If you want to set up a 1MW solar plant the cost approximately is ₹5 crore. Thanks to the government, you get accelerated depreciation of 60% in the first year and 40% in the next year. In addition to that you get ₹1.2 to ₹1.3 income tax benefit.

“A 1MW unit will generate approximately 15 lakh units a year. Multiply this with the cost of power ₹9 to ₹10 for industries and ₹15 for malls and you save ₹1.35 (industries calculation) per year. So in three years your solar plant has been paid for.”

Despite this cost plays a big role in getting contracts. Says Swati, “in the manufacturing space we are competing with a giant, Vikram Solar but though their PV panels are cheaper than ours, our installation cost is cheaper than theirs. Add to this the fact that we are personally present at all our sites and we win.”

For a start up, attracting talent is a big headache. Says Shivhar Mendkule of Saururja, “Luckily for us all of our directors are technical people. I am an MTech; our technical director Avinash Chinmaygabe has an MS in Renewable Energy from the UK. Ninety per cent of our team is tech people.”

For Sunshot, after crossing the self-learning curve, they managed to hire a good team. Says Rahul: “In 2013 we got ₹3 crore from an HNI in Pune. With this we built a team and could even invest in R&D.”

Says Swati, “For a start up getting good people is the biggest hurdle. People don’t trust you since you are new they’re not sure how long you will last.”

With so many players in the solar power arena, what is it that separates them from the rest?

For Sunshot it is their cloud-based IOT. Says Rahul, “We have developed in house the best could based IOT platform that connects the solar panel, the MSEB and the diesel generator. We can control through this IOT platform in real time our clients power needs and switch from solar to generator to MSEB.”

Solar Water Heating Basics

What is Solar Water Heating?

Solar water heating collectors capture and retain heat from the sun and transfer this heat to a liquid. Solar thermal heat is trapped using the “greenhouse effect,” in this case is the ability of a reflective surface to transmit short wave radiation and reflect long wave radiation. Heat and infrared radiation (IR) are produced when short wave radiation light hits a collector’s absorber, which is then trapped inside the collector. Fluid, usually water, in contact with the absorber collects the trapped heat to transfer it to storage.

Two principles govern solar thermal collectors. First, any hot object eventually looses its heat back to the environment. The efficiency of a solar thermal collector is directly related to heat loss, mainly from convection and radiation. Thermal insulation is used to slow down heat loss from a hot object to its environment.

Second, heat loss is more rapid if the temperature difference between a hot object and its environment is larger, in this case between the temperature of the collector surface and the ambient temperature. (But the same goes for transferring heat from the collector to the fluid, a larger difference between the collector and the liquid, the more heat is transferred.)

The most basic approach to solar heating of water is to simply put a tank filled with water into the sun. The heat from the sun would heat the metal tank and the water inside. This was how the very first SWH systems worked more than a century ago. However, this setup would be inefficient because there is little to limit the heat loss from the tank. Adding an insulated box around the tank, and adding glass above the top where the sun comes in would do a lot to retain heat.

A more common collector is called a flat plate collector. It has a large, flat surface area (absorber) to maximize exposure to the sun, and has small tubes bonded to it. Fluid runs through the tubes, collecting the heat from the absorber. The sides and bottom of the collector are well-insulated, and glass on top completes the insulation.

This is quite simple, but there are some very technical factors involved in making the collector as efficient as possible. One is the coating on the absorber, which is specially formulated to both absorb as much heat as possible, and to radiate back out as little heat as possible. Another is the glass, which is high-iron and specially coated to let as much light energy as possible through and to also prevent as much heat loss as possible.

Another popular type of collector is called evacuated tube, which has a long, skinny absorber that is inside a glass tube. The tube has the air evacuated out of it, which makes it highly insulated—not too different from a thermos used to keep drinks hot.

The final type of collector is a parabolic dish or tray, which increases heat potential by concentrating sunlight onto a small absorber. These are very rare in home water heating systems, and more commonly used in utility-scale systems to create steam which runs turbines to make electricity.

The basic components in home solar heating systems include:

1)Collectors to take the heat from the sun and pass it to a fluid

2)The heat transfer fluid which takes the heat from the collector for use or storage

3)Heat exchangers to transfer the heat from the fluid to a home’s domestic water.

4)Pumps to move the fluid through the collector and/or the exchanger, and sometimes to move the domestic water through the other side of the exchanger.

5)Controllers to run the pumps when there is collector heat available.

India’s Tata Power To Invest $90 Million In Renewable Energy Subsidiary

One of India’s leading private sector power companies is planning to infuse large sums of equity into its renewable energy subsidiary to enable the latter to execute large-scale solar power projects.

According to media reports, Tata Power will invest $90 million in Tata Power Renewable Energy Limited. These funds will be used for setting up large-scale solar power projects with a total capacity of 320 megawatts. These projects, secured through competitive auctions, are spread across six states.

Tata Power Renewable Energy came into being in late 2015 after the parent company decided to shift all renewable energy assets to a separate entity, with reported plans of an initial public offering in the future. In mid-2016, Tata Power Renewable Energy acquired 1,140 megawatts of solar and wind energy assets from Welspun Energy, a leading renewable energy IPP at that time.

Now, Tata Power Renewable Energy controls around 2 gigawatts of solar and wind energy assets.

Tata Power Renewable Energy owns and operates India’s largest solar power project based on domestically manufactured solar modules. The 100-megawatt project is part of the Anantapur solar power park in Andhra Pradesh; the park will have an installed capacity of 1 gigawatts once it is fully operational.

The company has been aggressively raising funds to keep up the growth in the highly competitive Indian market. In H1 2016, the company raised almost $150 million by issuing non-convertible debentures to retire debt.

All these investment plans and fundraising activity is part of the much larger plan by parent Tata Power to increase the share of renewable energy in its portfolio as solar and wind energy are now increasing challenging the cost advantage coal once enjoyed.

In April 2016 Tata Power announced,

(P)lans to increase its share of renewable energy output from 20% to 35-40% by 2025. The company currently has an installed capacity of 9,156 MW, including 593 MW from wind energy and 60 MW from solar power projects.

Tata Power hopes to increase its installed capacity to 20 GW by 2025. A 40% renewable energy share would mean 8 GW capacity. The company has recently increased its participation in solar power auctions.

What is Hindering Solar Roof Top Sector In India?

The renewable energy target of 175 gigawatts (GW) by 2022 is making progressive headways. Solar power plays a central part in achieving this goal and installation of utility scale power has seen a dramatic increase in the past 12 months. Rooftop Solar, however, is still lagging and a lot more needs to be done to achieve its 40 GW capacity target by 2022 within, the bigger target.

India’s total installed rooftop solar capacity is estimated at only 1,247 megawatts (MW) (till 31 December 2016) which is about 3 per cent of the targeted 40 GW by 2022. 

The study released by Indian Council for Research on International Economic Relations (ICRIER) states that the total investment requirement to meet the outstanding 38.75 GW rooftop solar target, after considering the current subsidies is Rs 1.8 trillion ($ 28 billion). Despite of a tenfold growth in the rooftop solar capacity, a lot of ground still needs to be covered.

Given the considerable gap between currently installed and expected capacity by 2022, there is a greater need for investments in rooftop solar. So what are the major barriers that are hindering the rooftop solar segment to take off in its full potential?

One of the major hurdles noted in the study, is the high upfront costs for installation, which is a barrier for many. The size of a typical rooftop solar installation in the commercial and industrial segments is around 150-200 kilowatts (kW), costing between Rs 9.7-13 million, assuming the current price of Rs 65,000 per kW.

Commercial and industrial consumers are often reluctant to invest such a high amount upfront, especially for a non core business activity.

Second is the issue of finance. Due to perceived high risks and suspicion about performance, banks are unwilling to lend to solar rooftop projects and the borrowing costs can be as high as 14 per cent or more.

Furthermore, the market for the third party debt capital from bond issuance is still marginal in India. In fact most of the rooftop solar projects in India are being financed with equity capital with minimum or no debt. Due to the smaller size of the projects, the developers do not approach banks for loans because of the proportionately higher transaction cost per unit of the project cost. As the cost of the equity capital is usually more expensive than debt, the overall project cost also becomes more expensive.

Third comes the perception of risks and performance among the consumers themselves. Rooftop solar still remains a relatively new technology in India and thereafter there is a perception that it may not perform as expected over its lifetime. The report goes on to add that there is a trust issue as several entrepreneurs in the rooftop market are comparatively new with no or little track record.

Although 27 states have issued net metering policies or regulations, only a few states have begun the actual implementation of the policy. ‘Net metering’ is a mechanism of selling the surplus power generated, which is them net amounted in the consumer’s electricity bill.

Without net metering, the solar rooftop economics could go for a toss, especially as the third part model comes in where the owner of the solar plant at a consumer’s roof is not the consumer himself, but the developer. The slow or patchy progress in the net metering policy can be attributed primarily to issues like inadequate policy framework, passive opposition from DISCOMs and insufficient training at the local utility level.

“Implementation of rooftop solar is taking place at a much slower pace and it seems unlikely that the government would achieve its 40GW target by 2022. Specific policy initiatives to support rooftop solar especially effective net-metering implementation and offering incentives in order to attract financial investors’ needs to be introduced”, mentioned another report released by industry lobby group PHD Chamber of Commerce and Industry and credit rating agency CARE Ratings, last month.

There is another major challenge in the form of storage. Currently the cost of a rooftop solar system with battery storage could be between Rs 90,000 and Rs 1, 35,000 per kW, depending on the voltage.

The study jointly done by ICRIER, Stockholm Environment Institute (SEI) and Climate Policy Initiative (CPI) also pitches for local government’s participation as a much better proposition, given that fact that rooftop solar is a decentralised form of electricity generation. The study proposes a bond model in which municipalities can play an active role in raising debt capital for private developers under third part financing (OPEX) model, reducing the costs of debt capital.

“The main advantage of the proposed public debt based financing OPEX model for rooftop solar is that compared to the private developers; municipal governments are in a better position to raise capital by issuing bonds. They posses relatively large size balance sheets which can have the financial strengths and capital to raise finances. This also includes guarantee from the state government which places them in a better position to secure guarantees on bonds, as compared to the private developers.

Rising Chinese solar module prices may put solar power projects at risk

Rising prices of Chinese solar modules may arrest the sharp decline in Indian solar power tariffs and also put at risk projects that won licences betting on a continued decline in module prices.

Several developers and analysts Mint spoke to said that the record low tariff of Rs2.44 per per kilowatt hour (kWh) at the auction of 500 megawatts (MW) of capacity at the Bhadla solar park in Rajasthan in May was quoted assuming module prices will fall to around 23 cents per watt.

With the module prices currently around 32 cents and the August delivery quoted at around 34 cents, developers are wary about the future tariff trajectory.

Modules account for nearly 60% of a solar power project’s total cost and their prices fell by about 26% in 2016 alone.

Module prices have, however, firmed up with China extending the feed-in tariff regime, which ensures a fixed price for power producers, for the third quarter and US developers placing advance orders to shore up cell and module supplies amid demands for a cap in prices of cheap imports to the US.

“There is a cause for concern given the aggressive solar power bids in the country,” said a project developer who had participated in the Bhadla solar park auction conducted by state-run Solar Energy Corp. of India.

Most solar power developers in India have been sourcing solar modules and equipment from countries such as China, where they are cheaper.

According to consulting firm Bridge to India, the local solar module market is dominated by Trina Solar (25.7% market share), Hanwha (10.5%) and Risen (7.6%), with domestic manufacturers’ accounting for only 10.6% market share.

“In an integrated international demand-supply scenario, bidders have to take cognisance of the situation which can be largely beyond their control. If they assume an optimistic scenario while bidding and if one of the variables goes significantly wrong, then it can lead to complete unviability of the project,” said Sanjeev Aggarwal, managing director and chief executive of Amplus Energy Solutions Pvt. Ltd, a solar rooftop project developer.

India plans to generate 175 gigawatts (GW) of renewable energy by 2022. Of this, 100GW is to come from solar projects.

“We feel there is a bit of irrationality in the competition,” said Pankaj Sehgal, chief executive officer, SUN Renewables, which is not present in the grid connected ground mounted large solar project space. SUN Renewables sets up distributed generation solar power projects.

“The prices have gone up a bit in the third quarter because in China originally they were to do away with feed-in tariffs and move towards competitive bidding which is the norm in India. They have extended feed-in tariff for the third quarter. Hence, tariffs have tipped up rather than come down which has been the case,” said Sehgal.

Of China’s solar module manufacturing capacity, estimated to be around 70GW per year, the major markets are the US, India and China itself. However some believe this is a temporary phenomenon.“It is a temporary phenomenon for the next three months,” said Sunil Jain, chief executive officer at Hero Future Energies Pvt. Ltd.

“The prices developers have quoted are for projects that will be commissioned 12-18 month down the line. This present increase in prices of solar modules is not a long-term trend. It’s a trend that will be reversed in a quarter or two, after which prices will again come down. For developers, it is always a concern that modules prices may not fall as much as they estimated at the time of bidding. Timing has a lot of role to play,” said Jasmeet Khurana, associate director at consulting firm Bridge to India.

Major Chinese solar module manufacturers include Jinko Solar, JA Solar Holdings, ET Solar, Hanwha Group, Chint Solar, GCL-Poly Energy Holdings Ltd and Trina Solar Ltd.

“The prices in the past have come on that trajectory, but obviously they can’t continue in that trajectory; otherwise, they will virtually become zero. So, there is not a significant technological breakthrough that has happened that will support that kind of assumption going forward. It has been largely based on the supply-demand imbalance. There is always incremental improvements but not to justify that steep decline in the cost curve,” said SUN Renewables’ Sehgal.