Rooftop solar PV system: Will it be a game changer?

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The increasing viability of rooftop solar PV systems and their multiple benefits could be a game changer for the country. Although the adoption rate of rooftop solar PV systems is still at a very negligible scale, today, more and more business and corporate houses are adopting this viable and sustainable solution

By Srabani Sen

Rooftop solar PV systemFriday, July 18, 2014: Over a long period of time, the focus was only on large-scale grid-connected solar power plants. But today, the increasing viability of rooftop solar PV systems, and their multiple benefits, could turn out to be a game changer for the country. Although the adoption rate of rooftop solar PV systems is still at a very negligible scale, the draft guidelines of the second phase of the Jawaharlal Nehru National Solar Mission (JNNSM) has set a target of 1000 MW for rooftop projects, both at off-grid and grid connected levels, during the period 2013-2017. This seems viable in the context of the falling prices of solar (PV) modules. Apart from residences, more and more business and corporate houses are adopting this viable and sustainable solution to cut energy costs and reduce the country’s dependence on fossil fuels.

Why should one install a rooftop solar PV system?

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Electricity is not only becoming more expensive with each passing day, but also scarce. As the demand-supply gap for electricity is increasing, people are adopting DG sets, which pollute the environment. Hence, it is the responsibility of corporate houses and business enterprises to adopt rooftop PV systems, and become self-reliant and environment-friendly. “Many corporate houses in India are shifting from conventional energy to renewable energy sources to protect themselves against the continuous increases in electricity costs. Besides the economic benefits given by the government, the other benefits include green energy adoption, corporate sustainability and brand image enhancement,” points out Dr Arul Shanmugasundram, executive VP (projects) and CTO, Tata Power Solar.

Says Praveen K Jain, associate vice president, Knowledge Centre, Su-Kam, “Solar PV systems demonstrate environmental consciousness. In the context of increasing energy costs, they help users in significantly cutting down on their electricity bills. Rooftop solar plants offer several advantages over other sources of power, like lower electricity bills, a decrease in transmission and distribution losses, low gestation time, and improved tail-end grid voltages.”

Praveen Jain also points out that, currently, solar energy is one of the cheapest sources of energy and will become even cheaper in the coming years. The payback period for a rooftop solar PV system is now three to five years, depending upon the type of installation, after which users can derive returns and benefits from the system for the next 25-30 years. In case a corporate house wants to install a rooftop solar PV system, it needs to take approval from the chief electrical inspector to government (CEIG) for connecting power to the in-house grid. For external connectivity, the state’s transmission company’s approval is needed, informs Dr Arul Shanmugasundram.

Types of rooftop solar PV systems

Rooftop solar PV systems are of three types, and users can choose as per their requirements:

  • Grid-tied rooftop systems supply generated power to the grid and also power the load. A major limitation of this system is that it does not generate power during a power failure as the inverter shuts down the system and no power is sent to the grid.

  • Grid-interactive rooftop systems work with a battery backup or a diesel generator to support the load. These can work during a power failure.

  • Off-grid systems work only with a battery backup or diesel generator in off-grid applications.

Components of rooftop system and their capabilities

A rooftop solar PV plant requires only a few components—PV modules (also called panels), an inverter, battery/batteries, mounting structures and a charge controller.

Solar power conditioning unit (PCU) is an integrated system consisting of a solar charge controller, inverter and a grid charger. It provides the facility to charge the battery bank either through solar power, the grid or a DG set. The PCU always gives preference to the solar power and will use the grid/DG power only when the solar power/battery charger is insufficient to meet the load requirements,” explains Praveen Jain.

PV modules: The PV modules could be thin film or crystalline, but experts recommend crystalline panels because these are more efficient for installations where space is a constraint. Thin film modules require more installation space, for the same capacity, than crystalline modules.

Panel efficiency is calculated as per the area it occupies. The capacity of a solar panel, that is, the output of the plant, reduces at temperatures above 25°C and increases at temperatures below 25°C.

Inverters: The inverter and the battery are very important components of rooftop solar systems. They determine the quality of AC power and also the kind of loads that can be powered with solar energy. However, inverters need to be replaced during the lifetime of the plant.

Not all rooftop solar PV plants generate power during power failures. If the inverter uses another source of power as a reference voltage, it can function, but if it is designed to use only grid power as a reference voltage, then the inverter will not be able to function in the absence of grid power and the solar plant will not generate power during power failure.

So one can choose a grid-tied inverter, but it will not generate power during a power failure. An off-grid inverter works only with a battery backup or diesel generator in off-grid applications, and is suitable for applications where grid power is not available, but is not the right choice if one needs a solar plant to work along with grid supply. On the other hand, a grid-interactive inverter works both with the grid supply and with either a battery backup or diesel generator, and can work during a power failure as well.

A new type of hybrid inverter can automatically manage between two or more different sources of power (grid, diesel or solar). It has inbuilt charge controllers, MPPT controllers, DC and AC disconnects, etc.

Mounting fixtures: Solar panels are mounted on iron fixtures so that they can withstand the wind and the weight of panels. The panels are mounted facing south in the Northern Hemisphere and north in the Southern Hemisphere for maximum power tracking. They are tilted at an angle equal to the latitude of that location.

Trackers: Trackers help to mount the panels in such a way that these panels follow the sun as it moves across the sky. They can increase the power output from the PV plant, but add significantly to both the initial cost of the plant and maintenance expenditure.

Battery: A battery backup can ensure that the load gets sufficient power. Batteries and their charging equipment are not 100 per cent efficient. There is a loss of energy both while charging and discharging the battery. A battery pack can add about 25-30 per cent to the initial system costs of a rooftop PV solar system. Usually, a set of two batteries is installed for each kVA of a solar inverter’s capacity.

Charge controller: A charge controller regulates the DC power output from the rooftop solar panels that are used to charge the batteries. It provides optimum charging current, and protects the batteries from overcharging.

Space and capacity required, and the electricity generated

speakersAccording to Praveen Jain, approximately 7.4-9.3 sq m of roof space is required for a typical 1 KWp solar PV system. A proportionately larger area is required for higher capacity systems. A shade-free roof area is a must since shadows affect the PV plant’s performance.

So, how much electricity does a rooftop solar PV system generate? Says Praveen Jain, “Solar energy generation is subject to the solar irradiance (power per unit area) of the location where the system is installed. On an average, a 1 KWp solar PV system can generate 90-150 units of electricity per month.”

And how does one ascertain the capacity of the solar power system one requires for a home or office? Says Praveen Jain, “For 3-5 units (depending on the type of solar installation—on-grid or off-grid) of daily electricity consumption of any household, one requires to install a 1 KWp solar system.”

Dr Arul Shanmugasundram points out another advantage of installing solar rooftop systems. “If a user has excess electricity, he can inject it from his rooftop installation into the grid through a power purchase agreement (PPA) with the local distribution utility in his area. Under this agreement, a tariff is determined by the appropriate State Electricity Regulatory Commission (SERC),” he says.

Cost of a rooftop solar PV system

The main hindrance to installing a rooftop solar PV system, apart from the lack of awareness, is the high upfront cost involved. The price range in India is much higher compared to developed markets such as Germany and Japan. The major cost is for the solar panels, housing fixtures, inverters, metering equipment, cables and wiring gear, and batteries. To this, one needs to add the operating and maintenance costs.

According to Praveen Jain, a hybrid rooftop solar PV system starts from Rs 20,000 for a capacity of 850 VA hups with 80 W panel. Su-Kam Brainy is one such solar PV hybrid system. A 1kWp solar PV system starts from about Rs 90,000 onwards, depending on the type of solar installation—on-grid or off-grid.

The cost of a rooftop solar PV system depends on the function it serves (to feed power into the grid, to support the load during a power failure, etc) and the incentives/subsidies available. It should be noted that all solar PV systems function by matching the voltage from some other source. Therefore, the system has to be integrated with the grid, a battery backup, or a diesel generator,” he says.

Though PV module prices have decreased significantly, they account for only half the total cost of the rooftop plant. So any further decrease in panel prices will affect only that portion of the cost of the project. Since the prices of the other components have not decreased the way the price of PV modules has decreased, one cannot expect too much of a reduction in the project costs.

Subsidies that matter

Government provides capital subsidies and tax benefits for putting up a solar rooftop system. However, the long delay in getting approvals for projects and in getting the subsidy act as a deterrent.

Capital subsidy: Government provides a 30 per cent subsidy on capital expenditure for rooftop solar PV systems. For commercial and non-commercial entities in grid-connected areas, the subsidy is granted for plant sizes of up to 100 kW. However, entities setting up solar plants for rural electrification can claim a subsidy for plant sizes of up to 250 kW.

Interest subsidy: Government also provides soft loans at 5 per cent per annum on 50 per cent of the capex for a five-year tenure for solar projects by both commercial and non-commercial entities. Commercial entities can claim either capital or interest subsidies. But a non-commercial entity can claim both subsidies, simultaneously.

Accelerated depreciation: For solar PV systems, a company can claim 80 per cent depreciation in the first year, leading to savings on income tax on overall profit. This benefit can be claimed by both commercial and non-commercial entities.

Process of claiming financial incentives: The financial incentives mentioned above can be availed by filling in the prescribed application form and sending it to the Ministry of New and Renewable Energy (MNRE) for project approval. A commercial entity has to indicate its preference for a capital or an interest subsidy. Once approved, in case of an interest subsidy, MNRE forwards the application to a commercial bank for the soft loan. In case the capital subsidy option is selected, MNRE provides the subsidy money in three phases—at the start of the project, mid-way through it and after a successful inspection, post-completion.

Current market scenario of solar rooftop installations in India

As per the latest market studies, India’s installed capacity for solar power generation has increased tremendously during the last few years. Rising electricity demand, high irradiation levels, favourable government policies, and huge investments are supporting growth in the solar industry.

The market for rooftop and distributed solar systems in India currently stands at a cumulative capacity of 190 MW. This is almost equally divided between large scale rooftop solar installations (industrial and commercial) and small scale rooftop solar systems (residential and telecom). “The installations in 2013 were down from the 2012 levels as there have been issues with the disbursement of subsidies from the Ministry of New and Renewable Energy (MNRE). Most industry players are now asking for the subsidy mechanism to be removed altogether as uncertainties with the mechanism are causing more harm to the market than good,” says Jasmeet Khurana, senior manager, consulting, Bridge To India, a solar energy consulting firm.

2014 promises to be a year of recovery for the solar sector in India. Bulk of the projects under JNNSM Phase II policy will be constructed through next year and state-led projects are also expected to see some action in 2014. More number of programmes will get funds while PV demand will also increase. Phase II of JNNSM now specifies that 50 per cent of the projects (375MW) need to be built with domestically manufactured cells and modules. Similar provisions such as domestic content requirement (DCR) in state policies as well as future solar policies will tremendously boost local manufacturing and reduce forex outflows and associated volatility in pricing,” explains Dr Arul Shanmugasundram.

Outlook by 2018

Bridge To India expects that the rooftop and distributed solar market in India will grow at a CAGR of about 66 per cent, and by 2018, the rooftop solar market will have a cumulative market size of over 2100 MW. “This will include over 750 MW for large scale rooftop systems, more than 450 MW for telecom towers and around 900 MW for residential purposes,” adds Jasmeet Khurana.

 

MNRE and state initiatives in promoting rooftop solar installations

MNRE has launched a pilot scheme for solar systems that range in size from 100 kW to 500 kW. The Solar Energy Corporation of India (SECI) is the nodal agency for the programme, which aims to generate feedback and further promotion of the concept in the country. Under this programme, rooftop solar systems are to be connected to the grid without battery backup. The surplus power, after consumption in the building, will be sent to the grid. Under the scheme, 30 per cent of the cost would be provided as a subsidy and 70 per cent is to be met by the consumer.

States’ initiatives

States are also playing a major role in promoting rooftop solar PV installations. Besides the MNRE scheme, there are several states that have announced their own initiatives for rooftop solar systems, and are coming out with separate plans.

In Gujarat, Gandhinagar has seen generation of 1.39 MW of solar power through rooftop installations. Another scheme has also been launched to develop 25 MW of power from rooftops in five other cities.

Kerala has announced the ‘10,000 rooftops’ programme that aims to generate a total of 10 MW of solar power annually by installing solar panels of 1 kW capacity on 10,000 houses across the state. It offers a 20 per cent subsidy over and above MNRE’s subsidy. Over 6000 systems of 1 kWp each have been installed in Kerala under this scheme, and around 4000 more will be installed by the end of 2014. Kerala has also announced a similar policy for 25,000 additional rooftop systems.

Haryana is targeting commercial and industrial units for setting up rooftop solar systems to overcome the shortage of power in the state.

Tamil Nadu aims to install 350 MW of rooftop capacity in three phases – a scheme that began in 2012 and will go on till 2015.

Karnataka has a target of installing rooftop solar systems of 5-10 kW capacity on 25,000 roofs across the state.

Andhra Pradesh launched a campaign to encourage house owners to install solar panels on their rooftops and sell surplus power to the state.

Uttarakhand has come up with a policy to harness solar energy by installing solar panels on rooftops and wastelands around buildings. 

 

Cost of the components of a rooftop solar PV system
Component

Rs

% of total cost

PV modules (crystalline)

52,000

52%

Inverters

23,000

23%

Other parts of the system (cables, etc)

17,000

17%

Installation

8,000

8%

Total

1,00,000

Please note:The above prices are for components from Tier 1 manufacturers that offer 5 years’ warranty. Battery backup has not been added as that can alter the calculations significantly.

Source: Solar Mango

 

Final cost of 1 kW rooftop solar PV plant after subsidy
Item

Rs

Cost of a 1 kW rooftop solar plant (estimated)

100,000

Subsidy @ 30%

30,000

Net cost after subsidy

70,000

Accelerated depreciation @ 80%

56,000

Tax rate

35%

Tax saved through depreciation

19,600

Net cost after both A+D and subsidy

50,400

Source: Solar Mango

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