Rooftop Solar Markets

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Rooftop Solar

Markets Policy, Trends & Issues

2

Rooftop Solar Markets: Policy, trends, & Issues

Contents

Introduction 4

The Rooftop Solar Market 5

Solar PV Technology 7

Rooftop Solar PV Installation 9

Net metering 14

Power Purchase Agreements 15

Grid Connectivity 16

Inside this issue:

3


Policy Landscape 18

Policy bottleneck 20

Financing of rooftop solar PV 22

Approaching towards grid parity 25

About Firstgreen 27

Inside this issue:

4

While solar market in India is growing rap-

idly, and cost continuity decline solar is

reaching to grid parity especially to commer-

cial roof top consumers. Rooftop solar PV

still remain untapped and has significant

potential as grid parity in this consumer cate-

gory. The key to growth for roof top solar is

Net metering which allows roof top owners

electrical meter to be bi directional and grid

can be used as a storage media for the roof

top solar projects. Many utilities have been

discouraging net metering policies, in fact

recently Delhi introduced and was subse-

quently the discoms (distribution companies)

have the resources to monitor and verify the

FiT administration. In the city of Pune, al-

most 11% of the meters are faulty and this

leads to lack of confidence in the data from

these meters. It cites this challenge as one of

the reasons why the Delhi Government

scrapped its rooftop program me. Utilities in

most of the states are experiencing a shift

from direct sale to the open access. Open

access allows consumers to optimize their

electricity bills and source cheaper electricity

through bilateral PPA from independent

elect city generators. Last month open ac-

cess consumer saved 450Cr due to cheaper

electricity sourcing due to open access. As

the spot electricity prices are fallen by 14%

and many solar projects are available to do a

bilateral PPA with the short term sale con-

tract in the range of 4-rs/unit and long term

supply contracts 3-4 Rs/kWh. It makes

cheaper to source electricity through open

access to the commercial consumers rather

than buying electricity from Discoms at a

tariff from 7-9Rs/kwh.

In India, the application of solar PV has a

particular significance, given the condition of

its transmission and distribution infrastruc-

ture – high losses, poor power quality and

frequent load shedding. Most buildings, pub-

lic, private and commercial (for example,

malls, hotels, hospitals and nursing homes),

have diesel generators for back-up in case of

load shedding by the utility. Given environ-

mental considerations, the use of diesel

should be minimised. There is abundant

opportunity to use rooftop or building-

mounted solar PV systems to generate elec-

tricity and thereby reduce the consumption

of diesel. Due to the intermittent supply of

solar power and grid outages, diesel–solar

PV hybrid models could be potential solu-

tions. Generous subsidies have been offered

by the Government (both Central and State).

Despite this, widespread installation of solar

PV systems to generate electricity on urban

rooftops does not seem like a reality that will

take the shape in the near future.

“India receives Solar Radiation of 5-

7 kWh/m2 for 300-330 days in a

year. Thus the generation potential

using solar PV is estimated to be

about 20 MW/Sq. km. Based on the

above a CUF 0f 18-19% can be easily

achieved.”


Introduction

5

“A large contribution from

rooftop SPV is feasible in the

same order of magnitude as the

individual contributions from

the conventional coal based

power plants”


The Indian Solar Rooftop Market

While India has installed over 2 GW of

solar PV predominantly in the utility scale

ground mounted segment, the country is

looking to boost its rooftop solar market

as a part of its initiatives in the distributed

generation. According 2011 Census India

is having 330 million houses, of which 166

million are the electrified houses. In rural

areas over 76 million houses still use kero-

sene for lighting. MNRE initiated its rural

solar PV program and currently about 1.08

million houses are using solar for lighting.

As per the estimates of MNRE there are

140 million houses with proper roof

(Concrete or Asbestos / metal sheet)

which can accommodate about 1-3 kWp

of solar PV system. Similarly the large

industrial rooftops can accommodate

larger capacities in the range of 100-500

kWp. Hence MNRE estimates that there is

a potential of about 25000 MW rooftop

solar PV capacity that can be accommo-

dated on roofs of buildings having 2

rooms alone if we consider 20% roofs. If

the add the potential of commercial and

industrial rooftops, this potential can fur-

ther go up.

Some of the state governments has al-

ready initiated their rooftop solar PV pro-

grams and introduced feed in tariffs to

attract the investments in rooftop solar PV

projects.

Gujarat

In Gujarat government initiated a 5MW

Rooftop Project in Gandhi Nagar in PPP

model. In this scheme the generated

power from the rooftop solar is com-

pletely fed to the grid. The rooftop owner

gets paid lease rent (Rs.3.00 per unit) and

the project developer gets feed-in-tariff

(Rs.11.21) for 25 years. Looking at the

success of this project the government has

recently scaled up this rooftop scheme

for development of 25 MW in 5 other

cities.

Kerala

Similarly Kerala launched its 10,000

rooftop power plants program for 2012-

2013. In this scheme each applicant eligi-

ble to apply for 1 kW only, and the total

capacity target is 10 MW . • Due to the

small per capita limit; the target audi-

ence will be only households and small

cottage industries. Apart from the

MNRE’s 30% capital subsidy, the state

is offering a discount of Rs. 39,000 per

system.

West Bangal

West Bengal has initiated a net-

metering solar rooftop model promoting

self consumption. Under the WBERC

Regulations, grid-integrated rooftop PV

is allowed only for institutional con-

sumers like government departments,

academic institutions, etc. The system

size limited to 2-100 kW, Connectivity

is allowed at Low Voltage or Medium

Voltage, or 6 KV or 11 KV, of the distri-

bution system of the licensee. Solar injec-

tion is permitted only up-to 90% of the

annual electricity consumption, and the

net energy supplied by the utility would

be billed as per existing slab tariffs. Solar

generation would first offset consump-

tion in the highest tariff slab and then the

lower slab. The Policy targets 16 MW of

rooftop and small PV installations by

2017.

6






power plants”


Tamilnadu

Tamilnadu introduced its solar policy inn

2012 with a targets 3000 MW solar

power by 2015. This target include the

350 MW of rooftop solar PV installa-

tions. The proposed capacity of rooftop

SPV capacity will be implemented in

three phases of 100, 125 and 125 MW

(per year) during 2013-2015. In this gov-

ernment of Tamilnadu will also target the

domestic consumers for 50 MW rooftop

capacity. The domestic customers will

receive a GBI of Rs. 2/kWh for the first

two years, Rs. 1/kWh for the next two

and Rs. 0.5/kWh for the subsequent two

years. The government also targets 300

MW from government buildings and

government schemes for rural and urban

lighting.. In order to promote the solar PV

in its industrial and commercial consum-

ers, the government has mandated 6%

SPO for HT consumers to achieve targets..

TEDA is designated single window agency

for implementing solar projects. The con-

nectivity to rooftop systems shall be at

240 V for rooftop systems up to 10 kW

capacity. However the connectivity will be

provided at 415V fir rooftop systems up

to 100 KW capacity.

Andhra Pradesh

AP Solar Policy 2012 is also promoting

roof top solar projects. Presently the

scheme is launched for 3 phase service

consumers and net metering guidelines

have been issued. The surplus exported

power will be bought by the Discom at a

rate of Rs.3.50 per unit for 7 years.

Rooftop Schemes through MNRE/SECI

MNRE has recently a pilot scheme for

grid connected rooftop PV power pro-

jects. The scheme allows system size

from 100 kW to 500 kW . Aggregation of

capacity from smaller roofs is allowed.

Systems are to be grid connected without

battery back up. Solar power would be

exported to grid, whenever in excess of

the consumption of the building. SECI will

implement the scheme through competi-

tive bidding on the project cost. The se-

lected bidders in each city will implement

the projects. 30% of the cost would be

provided as subsidy and 70% to be met by

the consumer.

Phase-I of this scheme is already started

with the following allocations:

Chennai – 2 MW

Bangalore – 2 MW

Delhi – 1 MW

Gurgaon – 0.5 MW

Phase-II: Bids invited for a capacity of 11.1

MW:

Jaipur – 3.1 MW

Bhubaneswar/Cuttack – 1 MW

Hyderabad – 2 MW

Gurgaon – 1.5 MW

NOIDA/ Gr . NOIDA – 1.5 MW

Raipur – 2 MW

7

Typically there are two business models

prevailing in the market which includes

installing your own solar PV system and in

other business model a THIRD PARTY devel-

oper owns , operate and maintains the roof

top solar PV system and the home owner/

consumer pays for the electricity which it

purchases from the roof top system in-

staller. The third party owned roof top

system sometimes allows consumer to

receive electricity at a lower price than

grid electricity. However, it doesn’t allows

home owners to avail certain financial

benefits such as tax benefits and capital

subsidy associated with the installation of

the roof top systems. A typical 5 KW roof

top system costs about 5 lakh rupees how-

ever, the government provides a 30% capi-

tal subsidy and accelerated appreciation

benefits which makes the investment

cheaper and the electricity is available to

the consumer at a price of about 5 -6 per

unit. However, if the same system is in-

stalled by a third party on build, own and

operate basis a PPA is signed between the

roof top leasing agency and the home

owner. Although the financial and capital

subsidies are enjoyed by the roof top sys-

tem installer the cost of electricity is typi-

cally about Rs. 7 per unit which is some-

times at par or little higher than the grid

electricity .

We live in the era of uncertainty and the days of free & cheap grid electricity are over.

Electricity is a commodity which needs fossil fuels and we have to learn for paying its

cost. Our country is running out of fossil fuel resources; the growing electricity demand

will push prices further up. Heavy dependency on the fossil fuels has become a threat to

the country’s economic growth. India has promising potential of solar as well as wind

power and it has competitive advantages in terms of cheaper renewable energy.

Rooftop solar will not only provide the energy independence to domestic and

commercial consumers but will ease out the problems of energy demand supply gap.

There is an urgent need to address the policy, regulatory, institutional, financing, and

legal issues for large scale deployment of rooftop solar PV systems.






power plants”


Business Models

8

Solar Rooftop System

A typical rooftop system generally com-prises of the following equipments:

SPV Power Source

Inverter

Charge Controller (only with system with batteries)

Mounting Structure

AC and DC Cables

Earthling equipment /material

Junction Boxes or combiners

Instruments and protection equipments

PROS/CONS SELF OWNED SOLAR PV SYSTEM SOLAR LEASE / PPA

COST SAVINGS Electricity is cheaper as compared

to grid electricity. It can be as low

Rs. 5 / unit.

Electricity is relatively cost-

lier than grid electricity. Typi-

cally power PPA’s are signed

for 20 years at a price of

about 7-8 Rs per unit.

PAY BACK PERIOD Payback period of your own roof

top system is about 5-6 years and in

future you get free electricity for it

life time of 20 years.

This option requires long

term payment and the home

owner pays up to 2-3 times

more than the cost of roof

top system. Sometimes it

requires end of term buy out

contract, new contract or

system removal fees.

MAINTENANCE Typically PV systems are mainte-

nance free as there are no moving

parts however regular cleaning of

PV modules is required for opti-

mum performance.

Maintenance is the responsi-

bility of the third party which

is charged by the roof top

system installer in the form

of energy charges.

UPFRONT COST Solar PV systems have high Upfront

costs. Typically a 5 KW system costs

about 5 lakh rupees.

There is no upfront cost in

case of solar lease agree-

ment. However, sometimes a

fixed upfront cost is charged

as a part of lease/PPA by the

third party.

TAX BENEFITS / CAPI-

TAL SUBSIDY

Tax benefits / capital subsidy are

available to the home owner which

makes the system cheaper

Tax benefits are availed by

the third party providing

system on lease.

Roof top solar not only allows to

take advantage of bilateral PPA but

also provide reliable power

supply option as generation is

happening at the consumer end

itself. If net-metering is allowed

electricity from roof top solar

is still available to the consumers

when the grid is down. While

solar as become a reliable source of

electricity supply and smart

grid technology are available to

integrate solar with the grid,

Rooftop solar provides a demand side

management (DSM) options to

the utilities to meet there Day peak

requirement. Rather than

supporting the net metering utilities

are differing the net metering

policies as a result consumers are

suffering for paying higher

retail tariff as well as power cuts.

There are various intermediate arrange-ments through which third party installs the solar PV system, operates it for a few years and finally transfers the assets to the home owners at an agreed price. It reduces the upfront cost to the home owners and at the same time provides cheaper electricity at a price lower than the grid electricity. Hence,

it is important to explore different options and have an expert advice before signing a Solar PPA with any third party as there are various hidden costs associated with these PPA’s.

The electricity generated from rooftop systems is still more expensive than conventional grid

electricity, however it all depends on how much is the opportunity cost of displaced electricity.

If the displaced electricity is a combination of grid and DG based electricity, in that case the

cost of displaced electricity is about 9 Rs/unit which makes solar PV system much more attrac-

tive to the roof top installer. Although the utility grade solar pv is now costing about 80-90 Rs/

Wp, the rooftop PV systems will cost about 120-150 Rs/Wp due to economy of scale. Consider-

ing a cost of 150 Rs/Wp for a typical roof top system a 10 kW roof top system will cost about 15

Lac. The building owner is also eligible for 30% capital subsidy (4.5 Lac) and accelerated depre-

ciation 9about 4 Lac). Hence the building owner has to spend about 40% of the total cost of the

systems, which makes PV attractive in terms of low capital cost.


9



SPV Power Source

Inverter


Mounting Structure

AC and DC Cables




It is possible to integrate the solar module with your existing home inverter system and can reduce the capital cost significantly. The solar panels are connected to the existing home inverter-battery system through a hybrid charge controller and can provide relief to the households for additional charging option apart from normal grid charging of the storage batteries. In the event of non requirement of solar electricity at the household, these surplus electricity can be fed back to the grid as well. The home owner has to install this converter along with the existing inverter which also acts as a battery charge controller and connects the AC mains & load output control system all in one.

The solar modules are connected to an inverter to yield 240 VAC at medium power levels (2-10kW). This system is connected to AC power lines (i.e., connected to the grid) as shown in Figure 1. The customer sells power to the utility during the day and buys power from the power company dur-ing the night. Some of the rooftop systems have inbuilt inverters, also known as micro inverters which convert the electricity gen-erated by module directly in to AC electric-ity at the module output itself. The use of micro inverter system greatly reduces in-stallation labour costs, improves safety, and maximizes the solar energy harvest.

It is possible to integrate the solar module with your existing home inverter system and can reduce the capital cost signifi-cantly. The solar panels are connected to the existing home inverter-battery system through a hybrid charge controller and can provide relief to the households for addi-tional charging option apart from normal grid charging of the storage batteries. In the event of non requirement of solar elec-tricity at the household, these surplus elec-tricity can be fed back to the grid as well. The home owner has to install this con-verter along with the existing inverter which also acts as a battery charge control-ler and connects the AC mains & load out-put control system all in one.

Recently NREL has developed a new breed of solar cells which are organic cells, which have been used for window panes to con-vert the sunlight in to electricity through the window panes termed as Solar Win-dow . The research team has developed a conductive wiring grid that is practically invisible, which provides for more efficient energy harvesting without interfering with the see-through quality of the panel.

Installing a solar rooftop solar PV system require a basis understanding of technical, economic and regulatory aspects to take a call for the viability of these systems. In-stalling a rooftop solar PV system is differ-ent than installing a typical solar water heating system as it has many sub systems such as inverter selection and net metering etc. PV systems have limitations that they produce power intermittently because they work only when the sun is shining. It is diffi-cult for PV systems to furnish all the power you need, and are typically used in conjunc-tion with utility-supplied electricity.


Solar PV Technology

10

How can we convert the existing home inverters in to a solar inverters? While there is a considerable interest in the utility scale grid connected solar power plants, roof top systems are equally getting attention and the country has about 43 MW of roof top systems connected to the grid. Rooftop PV systems find much more attractive due to the fact that these systems have potential to reduce transmission and distribution losses reduce additional burden of laying the T&D infrastructure. Connecting roof top solar PV systems to the grid is a great challenge, specially the rooftop systems which are in kW capacity, the utilities face tremendous challenge in terms handling the unstable sources of electricity at distributed level. While the PV system cost have come down con-siderably, roof top systems provide altogether a new market to the urban households who already has an inverter and battery storage systems as back up source in the event of grid unavailability. Most of Indian households are not having electricity access due to grid unavailability and have to install inverters which charge batteries from the mains and use the same electric-ity during the periods of non availability of grid. The grid supply is generally not available from 30%-50% of time in the small towns and condition in villages is even worse where the electricity supply is available for a period of only 8hrs in a day. Often the grid supply is not even enough to charge these inverters to provide uninterrupted power supply. These inverters when under the charging mode create additional peak demand which at times makes the load relief measure undertaken by the Utility as irrelevant. Integrating solar Photovoltaic with these existing home inverter system can provide relief to the house-holds for additional charging option apart from normal grid charging of the storage bat-teries and will also reduce the system peak which create another set of problems to the utilities. In the event of non requirement of solar electricity at the household, these sur-plus electricity can be fed back to the grid as well. Firstgreen along with some of the leading solar inverter manufacturer have developed a special device which can convert your existing home inverter in to a solar which can charge the existing battery through the solar panels as well. The home owner has to install this converter along with the ex-isting inverter which also act as a a battery charge controller and connects the AC mains & load output control system all in one.


11

A typical rooftop system uses photovoltaic (PV)

panels, installed on rooftops of commercial or

residential buildings, to convert sunlight into

electricity. The various components in a roof-

top solar system include PV modules, mounting

systems, cables, inverters, meters and other

electrical accessories.

Roof Area and Type

The typical preferred rooftop SPV installation

should be unshaded and free of other equip-

ment/structures of about 100-500 m2 per site,

which is equivalent to approx. 10-50kW.

A flat roof is the easiest as it offers flexibility for

orienting and tilting the solar panels for ideal

solar collection. In the sloped roofs, orientation

of

slope (N-E-W-S) is important as south facing

roofs produce maximum energy yields.

Roof Fixtures

The rooftop system is mounted to the posts

secured in the roof beams. Special roof leak

protection is added to each penetration to stop

leaks. These attached systems work for any

size, and hold tight even in windy areas. Roof-

top systems some time use weights (ballasts) to

hold the solar array to the roof instead of bolt-

ing it down. Ballasted systems do not penetrate

the roof but only work for large systems in low-

wind zones. These days hybrid mounts are also

being used for some structural attachments

combined with typical ballasted design. This

results in minimal roofing penetrations but

more security against wind hazard.


Renew-

Power evacuation

There are several options available for connection

to the network depending on whether connection is

on HT/LT side, grid reliability, voltage, other avail-

able sources of energy (grid, battery bank, DG sets

etc). In a typical grid tied rooftop SPV system, the

inverter is synchronized with the grid and in case of

grid failure the system gets disconnected by the

circuit breaker /auto switch provided in the in-

verter. The solar system can’t supply the consumer

load in the event of grid failure.

Rooftop Solar PV Installa-tion

12


A typical rooftop system generally comprises of the following equipments:

SPV Power Source

Inverter


Mounting Structure

AC and DC Cables




The underlining need for captive power source is obvious in this era as the conven-tional source of energy and power is de-pleting day by day. Government is thus, taking many initiatives to push the solar business in the country. Various kinds of subsidies and exemption from taxes have thrived for long. The customers have evolved over a period and are looking for something which give them high returns with low cost installation. To give a wider scope various marketing strategies are used to create the need for the consumer. Mar-keting has become the central part of run-ning a rooftop solar PV business. Many consumers are approaching for installations of rooftop solar.. This varies from state to state. And to an extent depends on the electricity consumptions of a consumer. The need of the consumer is not same al-ways, hence identifying the needs becomes difficult. To bridge the gap segmentation and targeting is done. this leads to more clarity. Customers are classified into various segments considering the rooftop solar. In geographic segment, the location of the

house is mapped. if the house is south fac-ing solar panels are most efficient, as it nullifies the shading aspect. so a customer having a house with roof facing south acts as prime customer. Demographic segment includes two types of customer: Residential and Commercial. In residential we have customers with small roofs and less elec-tricity consumption whereas under com-mercial, we have institutions, offices, hav-ing large roof space and very high con-sumption. In Psychographic segment, moral beliefs and values of a customer are cov-ered. There are customers who are envi-ronmentally friendly, and customers who want to save electricity by consuming very less conventional source. such kind of cus-tomers can be tapped under this segment. It is important to know electricity consump-tion, the customer technical awareness , and their intentions to use. Using this infor-mation to select the panels with the fea-tures that are most beneficial to the cus-tomer, one can tap the customer segregat-ing under Behavioral segment.


Assessing the rooftop potential

Basically segmentation is done to catch hold

of customers, and identifying the basic need

of consumer is the first step of this. With the

help of this segmentation, the targeting be-

comes easier, as now customers are segre-

gated according to their needs and can be

satisfied more efficiently. With a view of

price hike in the electricity charges, it is un-

derstood that the demand or rooftop solar

panels will be on a rise.

13


A typical rooftop system generally comprises of the following equipments:

SPV Power Source

Inverter


Mounting Structure

AC and DC Cables




The typical power output of a solar PV in-verter is in the range of 330-460V and fre-quency in the range of 47-52HZ .The output of PV inverter should be stepped up to the required voltage level of the grid to export electricity to the grid. It also needs to re-place the existing meter by a export-import meter so that the net metering can take place. Currently there are no clear guide-lines for net metering for different states which makes little confusing how to con-nect solar PV system with grid as well as the typical captive loads . It also needs to synchronize with grid and in absence of grid it needs to synchronize with DG sets as can we seen from following figure .The typical grid interactive PV system is connected through the LT consumer panel ,where in the consumer AC loads are also connected . The LT panel is also connected to utility side through a grid meter . In case the con-sumer AC load more than the electricity produced by solar PV . The electricity pro-duced by solar is consumed by the loads. However in case the consumer load is less than the electricity produced by solar PV the surplus electricity can be fed back to the grid through a grid meter which is typi-

cally export import meter . In case the con-sumer has the DG set ,it can also be con-nected to the same LT panel and the elec-tricity can be fed by DG set along with solar PV in the absence of grid electricity. It may be noted that through net metering you are only nullifying your electricity consumption and not selling electricity to grid. Through net metering the import export meter run in both directions . Hence when you are generating surplus electricity it feeds the same to the grid reduces the total electricity consumed dur-ing the month. Net metering provisions do not require any wheeling and banking agreement or a PPA with the grid as the consumer is not being paid for his surplus electricity to the utility grid. In such type of provision consumer is also not eligible for REC benefits. This is the reason many of the home owners having large rooftop area are not inclined to have rooftop system on there roof. May be in future if government considers the electricity generated by solar PV under net metering provision eligible for REC benefits ,it will make the roof top seg-ment attractive proposition for the invest-ments.


Grid Connectivity

Suggested net metering scheme

14

Net metering allows a roof top solar PV system owner to connect his solar PV system to the grid and sell its surplus electricity to the grid. Net metering allows electricity meter to spin forward when electricity flows from the grid into your building, and backward when your system produces surplus electricity that is not immediately used. Your excess electricity is “banked” on the utility grid. Currently CERC is under developing guidelines for net metering for roof top systems. Interconnection guide-lines are issued at each state level by the re-spective SERCs. For example in Delhi the solar PV rooftop project has to follow the Delhi Elec-tricity Supply Code, 2007 and the technical standards for Connectivity of Distributed Generation resources Regulations 2013 noti-fied by Central Electricity Authority. The indi-vidual rooftop PV system is typically connected to the same service line connection through the consumer is drawing power from the grid. As various states are initiating the adoption of rooftop solar projects, the large scale prolifera-tion of net-metering based rooftop would have an impact on the local grid and there is a need to assess the technical, safety and grid security issues arising out of possible reverse flow of electricity in the local grids. It is the responsibility of individual distribution licensee to provide net metering arrange-ment to all eligible consumers as long as the cumulative capacity can be absorbed in the local distribution transformer. While the grid connected rooftop systems are meeting the RPO targets of the distribution licensee, cur-rently there is no additional REC revenue avail-able in the rooftop solar projects.

The metering of rooftop solar PV systems is done typically through installation of two me-ters. One meter is used for recording the en-ergy generation at the solar PV system and the

other meter is used for Import/Export meas-urement purpose. The first meter, the solar generation meter, is generally installed at the solar PV generator end after the inverter and the other meter is a bidirectional meter (single phase or three phase as per require-ment) and this meter is used for commercial settlements.

The Solar Generation Meter is of 0.2s class accuracy. Some time there is a regulatory re-quirement to install a main and check meter in case the rooftop system is large. For example the CEA guidelines stipulates the mandatory requirement of

rooftop solar installations having capacity of more than 20 KW. For installations size of less than and equal to 20 KW, the solar check meters are optional. Electricity generated from a solar rooftop system is capped in some of the states. For example in Delhi there is a capping of maximum 90% of the annual consumption through the rooftop solar PV system and any additional electricity injected through the rooftop system to the grid is con-sidered as free electricity and there is no off set for the consumption is allowed. There is no linkage of the rooftop systems currently with the time of day tariff and consumers are said to offset their off peak electricity first through the solar PV generation.

The solar plant has to comply with the relevant standards specified by MNRE /BIS and CEA. Hence the roof top SPV system should be equipped with appropriately rated protective devices to sense any abnormality in the system and carry out automatic isolation of the SPV from the grid. The inverters used should meet the necessary automatic island-ing features in case of no voltage supply of low

“The key to growth for roof top solar is Net metering which allows roof top

owners electrical meter to be bi directional and grid can be used as a storage

media for the roof

top solar projects. Many utilities have been discouraging net

metering policies”


Net-metering

15


Renewable

Energy Eff iciency

Climate change

Grid connected Off- Grid

Incentive/ facility RECs GBI @0.5 INR, scheme extended. Recently solar energy corporation

of India (SECI) has introduced 30% capital subsidy for grid connected systems as well.

However, this scheme is only applicable cities like Gurgaon,

Jaipur, Hyderabad, Bhuvneshwer, Raipur and

Noida with a total capacity of 11 MW.

Roof top Capacity targets 350 MW. Subsidy of 20,000 kWh for first

10,000 applicants under the rooftop

scheme in addition to 30% capital subsidy

GBI of Rs. 2 a unit.

Grid Connectivity Connectivity is allowed only on the grid site of the consumer meter at 11

KV and 33 KV levels. Net-metering not allowed.

Dependent on grid availability - typi-cally, 95% at 33 KV level and about

85% at 11 KV level. Solar projects are not subjected to

scheduling currently.

Off-grid systems are to be synchronized with battery or DG set.

Surplus energy wasted if no batteries or bat-teries fully charged.

Sale of electricity Any private consumer or to the utility through PPA @APCC.

Net metering is also allowed under this policy.

The electricity injected in the grid can be fully used by the consumer at

any point in the day & night hours during the financial year without

payment of W&B In case of PPA default, electricity can be

sold to any third party or to the utility at an agreed price or APCC depending on the arrangement.

Only to the private con-sumer on site, no other

option.

Regulatory ap-provals required

Power evacuation and electrical inspec-tor approvals required.

No approval required except for documentary evidence of project com-missioning through do-mestic panels to claim

MNRE subsidy.

Policy for Off-grid systems

● MNRE provides 30% of capital sub-

sidy on the roof top systems (off grid).

● Benchmark cost for solar photovoltaic

panels (revised on 01/04/11 by

MNRE) the available subsidy is of Rs

81/Wp with battery and Rs 57/Wp

without battery storage systems

● Rooftop SPV can also be financed by

MNRE by a soft loan @5% .

• 80% accelerated depreciation bene-

fit is also available as per Section 32

of Income Tax Act.

•

Ideally we all would like to have grid independ-

ency and prefer an off grid solar PV system so

that whel the SPV system generates electricity

it can be directly used in the consumption.

However it would require batteries to store

the solar electricity when we are not using

this. These batteries can cost almost one third

the cost of your rooftop SPV system and re-

quire regular maintenance and replacement.

Off grid systems are suitable for the areas

which can not be connected to the grid. The

grid connected system provides the flexibility

to use the grid in place of your battery bank

and if your solar rooftop system is generating

electricity, you can use this electricity to bank

in to the grid and take it back as and when you

require through the provision of net metering.

Off-grid v/s Grid Con-nected

16

The recent cost reductions in solar PV has moti-vated many building owners to use on-site or off site photovoltaic (PV) generation to hedge against volatile electric utility bills. In case of onsite generation the building owner has an option of installing himself and owns the PV system. The another option to the building owner is to do a PPA with the third party for long terms and avoid the high capital invest-ments. Typically in case of rooftop PV systems the third party signs a PPA with the building owner and sell the solar electricity as a part of onsite generation to displace his costly DG based power generation. As long as this system is completely off grid, there is no problem in terms of meeting the regulatory compliances, however in case of grid interactive systems, if the solar PV installer at a building installs the PV plant, and go for net metering, there are no guidelines from Government of India for net metering of solar electricity. Also it is not clear that the PPA signed by the third party who sells is solar electricity t the building owner as well as to the grid in the event of non captive re-quirements, is he legally allowed to sell the electricity to both parties. The third party sale can be done under the group captive mode where the buyer should have stake in a solar spv at least 26% and should at least 51% of

solar electricity. Rest of electricity can be sold to the grid.

A growing number of third-party solar power providers are looking to rent roof surfaces from the home owners and install PV systems and sell the power generated to the home owner/local utility through the different available scheme of solar rooftop policies of government of India. Even commercial building owners can also lease their rooftop on rent to the solar PV developers and can do a long term PPA to use the electricity generated through the PV sys-tem.

Third party owned systems installed within consumer premises sometime fall under the ambit of sale of electricity on open access, thus inviting charges related to wheeling and sur-charge related to cross subsidy. Also net-metering based systems owing to their connec-tivity to grid and banking of electricity can also come under the purview of banking and wheeling charges etc. However some of the states are offering the waiver from these charges for the promotion of rooftop solar projects..

Open Access at 33 kV

Gujarat Maharashtra Tamil Nadu Andhra Pradesh

Rajasthan Karna-

taka

Transmission losses (%)

4.85% 5% 4.02% 4.40% 4.03%

Wheeling Losses (%)

6% 7% 7.89% 3.80% 5.00%

Banking Charges (%)

0 0 2% 2% 2%

Wheeling Charges (Rs/kWh)

0.04 0.14 0 0.11 0

Cross Subsidy Charges (Rs/kWh)

0.61 2.07 0 0.38 0.11

Electricity Duty (Rs/kWh)

15% 0% 0 0 0

Base Rate( as-sumed) (Rs/kWh)

5 5 5 5 5

Effective Rate (Rs/kWh)

6.43 6.3425 7.81 5.6955 6 5.6615

“if an electricity generator signs PPA

from Rs. 5 with an open access

consumer, the net rate to the

consumer ranges between Rs. 5.6-7.8

depending on the location of the state.

Cross subsidy surcharges are the

major factor in the state which impact

the electricity sale to a third party while

few states such as Gujarat do not have

any cross subsidy surcharge for Solar

on the other hand states such as Tamil

Nadu charge over Rs.2 as cross

subsidy surcharge. In order to avoid

the cross subsidy surcharge many

solar investors sign a PPA under

group captive scheme. The group

captive scheme requires at least 26%

of equity share in the solar project by

the consumer and has to consume a

minimum of 51% electricity from the

solar project. Many large consumers

are now tying up PPA’s with solar

generators to take benefit of group

captive generation scheme. It is

important that the buyers and sellers of

electricity must be aware of the

different state regulations and find out

an appropriate way for the third party

sale. In recent time, third party sale

model has also been adopted by roof

top owners where in the solar power

developer installs a solar plant at the

roof top of any building owner and

signs a PPA for electricity sale through

roof top solar. In case the electricity is

consumed directly by the building as

off- grid consumption, no REC benefits

are available. 30% capital subsidy and

accelerated depreciation can be

availed.”


Power Purchase Agreement

Open Access Charges in different states



SPV Power Source

Inverter


Mounting Structure

AC and DC Cables




17



SPV Power Source

Inverter


Mounting Structure

AC and DC Cables




Roof top solar scheme is presently being offered by Solar Energy Corporation of India and about 11.1 MW of rooftop systems have been planned in five cities in India which include Gurgaon, Jaipur, Hyderabad, Bhubaneswar, Raipur and Noida. Under this scheme a developer can install projects up to 250 Kwp capacity. Solar Energy Corporation of India is providing capital subsidy of the order of 30% and the generated power can be consumed by the rooftop owner and surplus power can be exported to grid through net metering provisions .This is for the first time ,the government of India has initiated a 30% subsidy on grid connected roof top PV system and we believe this scheme will attract lot of roof top owners to invest in roof top solar systems.

An off grid PV system is the simplest instal-lation in which may be in the form of DC load connected to PV modules directly, such as solar water pump etc. Unfortu-nately the solar radiation is variable hence the requirement of battery comes in be-tween the PV module and DC load. If the PV modules are used for charging battery a charge controller is also used to control the charging voltage of the battery , typically the stand alone roof top system work on 12-24V DC supply and connected to a battery. Charge controller regulates the battery charging and over charging disconnection options, if we want to use ac loads such as TV, Refrigerator and other lightning appli-ances, it require conversion of DC to 230-240V AC electricity and system is incorpo-rated with the inverter, which primarily responsible for two activities a) Charging of

the battery , b) Discharging the battery and converting the same in to ac electricity to meet the load requirement . First green has developed some of the charge controllers which can be connected to home inverter system and the existing inverter can be used as solar inverters .

Stand alone –off grid PV rooftop systems are more popular in India, however in Europe most of the rooftop systems are grid connected PV systems . Although CERC has issued net metering guidelines which have been adopted by various states like Andhra Pradesh, Tamilnadu and Kerala ,it requires clear net metering guidelines in order to promote grid connected rooftop systems


On-grid v/s off-grid

System

Rooftop systems are much more conven-

ient to use, as they can feed electricity

generated during the day to the grid

through net metering and can use the

same electricity in the night for the light-

ning and other appliances. In this case grid

act as a storage option and makes it pos-

sible to use solar electricity during the

night time ,there may be situations when

the electricity generated from rooftop

and solar PV plant is much more com-

pared to captive requirement. The surplus

electricity fed to the grid can be sold

through an attractive Feed-in tariff (FIT)

offered by the local utilities

18

B u i l d i n g - i n t e g r a t e d p h o t o v o l t a i c (BIPV) systems are photovoltaic (PV) solar en-ergy systems that are specifically designed to blend in with the architecture of a building, combining the economic and sustainability benefits of distributed solar energy generation with the aesthetic appeal of a seamless integra-tion into the overall building design.

BIPV system replaces the conventional building façade materials from different parts of the building’s exterior and significantly improves a building’s economic and ecological balance.

Different types of BIPV panels based on crystal-line silicon and thin film technologies that can be incorporated in the buildings include:

Transparent PV panels

Flexible PV Panel Opaque – Fixed PV panels

The feasibility of a BIPV system in a project will depend on various design considerations for e.g., areas available, type of PV module used- Crystalline or Thin film, Building orientation and anticipated energy production.

B I P V modules support structure is the building itself along with other conventional structural fram-ing. It replaces the conventional façade mate-rial like glazing/granite/marble and also pro-vides onsite electricity which will reduce carbon intensive energy consumption, thereby reduc-ing the net installation cost of the system. BIPV System also reduces thermal radiations into buildings and allows natural daylight pass through and further assists to improve sound and heat insulation of the building. Onsite electricity generation maximizes the energy efficiency by eliminating the transmis-sion losses that generally occur when electricity is supplied through the national grid. The cost of a BIPV system is similar to a solar PV system, but by replacing the conventional structural glazing material from the building façade, the net installation cost decreases. Along with this benefit, accelerated deprecia-tion and onsite electricity generation the pay-back period can be as low as 2 to 3 years and free onsite electricity is available through the life of the PV panels.


Renewable

Energy Eff iciency

Climate change

BIPV Systems

Economics of BIPV Systems

The typical cost of a building façade is about 10,000 Rs/Sqft and this can be replaced

by a solar façade of PV panels. Considering the PV installation cost of about 100 Rs./

Watt, the per square meter cost of PV based building façade is about Rs. 10000 per

Sq. meter. If we consider the tax benefits such as accelerated depreciation as well

the subsidy available from government, the façade cost through BIPV is almost at

par with the conventional façade. The falling cost of solar PV has made the BIPV

façade attractive and we believe this will be attracting significant attraction in near

future.

Cost per sq mt.

Rs/mt2.

10000

Area Required for 100 KW system

mt2

1000

Cost of 100 KW System

Rs. Lac

10

Approx. Structural Glazing cost

Rs/m2

6,000

Total Structural Glazing Cost in 1000 m2 area

Rs. Lac

6

Incremental Cost for BIPV Installation

Rs. Lac

4

19

Example of Delta roof top solar PV at Gur-gaon

Delta electronics has installed a 50 KW rooftop system at its new corporate office Gurgaon, which is platinum rated green certified building. The system is grid tied solar PV system having 3Kw string inverters connected to the solar panels, the system takes care of the buildings lighting, lift and chiller load requirement during the day and Delta has not used any Battery backup for the system. The installation is done in the form of the flat roof shade which reduces the building heat gain through shading caused by solar panels.


Example of Rooftop Solar PV System at Indra Paryavaran Bhavan

SunPower has recently installed a 930 kilo-watt (kW) rooftop SPV system at Indira Paryavaran Bhavan building in New Delhi. The high efficiency Sunpower PV panels have been used in order to maximize the rooftop utilization for energy generation. The state-of-the art landmark, Indira Paryavaran Bhavan is India's first net zero energy building.

Example of BIPV System at Ansal Experi-ence Centre, Lucknow.

Building Integrated Photovoltaic (BIPV) seamlessly combines buildings with photo-voltaic electricity generation, which fully utilizes the existing space without extra land usage. It turns the building from en-ergy consumption to clean energy genera-tion, which enriches the building value and improves life quality. The building uses two façade and the sec-ond façade is of thin film panels. Adequate care has been taken for the system sizing so that the string losses are minimum and the day lighting in the building is maintained.

Firstgreen has been the design and project management consultant in this project.

20

Germany has maximum percentage of solar rooftop installation. 71% of the total solar installation is rooftop, which is further subdivided in private build-ing, social commercial & agriculture building, large commercial building.

Before 2010, main policies for solar energy were Gujarat solar policy 2009 and MNRE Generation Based Incentive (GBI) scheme. Gujarat solar policy offered a tariff of INR 13/ kWh for first 12 year and INR 3/kWh from 13th to 25th year for solar PV pro-jects. Central government had an-nounced Jawaharlal Nehru National Solar Mission (JNNSM) in 2010 to promote

solar plant in India. The Mission will be executed in three phases and has set the ambitious target of deploying 20,000 MW of grid connected solar power by 2022.


The rooftop solar sector in India is gaining momentum with MNRE policy known as ‘Rooftop PV & Small Solar Generation Programme’ (RPSSGP) under the NSM, which aims to connect solar power plants with grid (Below 33 kV) and provide Generation Based incentives (GBI). Under phase-1 of JNNSM 37 MW of grid connected roof-top and small solar plants were installed. Total 78 projects are registered to set up 98 MW capacity project from 12 states. Project size is limited to 2 MW capac-ity. GBI is payable to the distribution utility for power purchased from solar power project selected under these guidelines. The GBI shall be equal to the difference between the tariff determined by the Central Electricity Regulatory Commission (CERC) and the Base Rate. Apart from RPSSGP, different states, like

Policy Landscape

Incentives and subsidies in different countries


21



Policy bottlenecks

Issues in connectivity of rooftop systems

Present regulations on connectivity do not recognize rooftop connectivity at low voltage (say 230/415V). No clarification on the appropriate voltage level for connectivity, capacity (kWp) restrictions for connectivity at each voltage level, connectivity at LT level when consumer connection is at HT level

No regulations for metering arrangements of rooftop solar PV. There should be clarification on meter location, accuracy class, type, sealing, reading, requirements for main meter/check meter/standby meter, separate metering arrangement or single meter with separate registry for export/import..

There is a need to specify responsibilities of Discom w.r.t joint meter reading, issuance of energy credit notes etc. as well as standardization of transformer and line losses. SERCs need to direct Discoms for energy accounting as well .

EVI filed a petition for connectivity and metering for solar rooftop under REC

mechanism in Haryana.

Discom did not agree to provide con-nectivity at 415 V

Discom did not provide clarification on connectivity and metering

SLDC still to come up with procedure for metering captive power projects

(including solar rooftop)

Tata Power Renewable Energy Limited (TPREL) developing a 500 kWp rooftop at Tata Motors plant in Pimpri, Pune. The plant is having a connection at 220 kV. Various options of connectivity were avail-able: 1. Inter-connection at 220 kV (transmission system) costing Rs.615 lakhs .

.2. Inter-connection at 22 kV Akurdi sub-station (Distribution system) costing 215 lakhs

3. Inter-connection at 440 V internal distri-bution system of Tata motors costing 35 lakhs (preferred)

However, Option-3 required addressing issues of grid connectivity, metering ar-rangement and energy accounting. A working group has been formed compris-ing CEA and MNRE to study the policy frameworks

22

Due to smaller ticket-sizes, rooftop SPV are not a very attractive proposition to the banks and financial institutions and the focus is always on the large scale ground mounted solar projects. There is a need to develop financing options through smaller banks and micro finance insti-tutions through credit enhancement partial risk coverage funds for rooftop SPV projects. Due to lack of incentives and lack of volume the banks and financial institutions are in the wait and watch approach. May be government of India can create some special line of credit dedicated for the rooftop solar projects, the way they have created the financing of off grid rural rooftop SPV projects. Currently the capital sub-sidy is also being extended by SECI under its rooftop solar project for different City’s. It is expected that similar subsidy schemes will be soon provided by state governments to pro-mote the grid connected rooftop solar systems. If we look the experiences of Germany and Japan, the rooftop SPV deployment was be-cause of the favorable policy and regulatory environment which facilitated easy financing of the solar projects. In case of third party financ-

ing/lease option the decision is generally stra-tegic and it is a typical business case which motivates the third party to invest in the roof-top system at some consumer. There are vari-ous intermediate business also work in the rooftop solar projects., for example in Califor-nia the third party provides the rooftop SPV systems in the form of a rental to the home owner. In some of the cases the financing is done through the utility financing from a dedi-cated fund created from a lavvy charged from the consumers. In some of the USA utilities the rooftop SPV is installed by the utility company itself as a part of its decentralized generation initiatives. Over the period the changing poli-cies have made it difficult to avail the balance sheet financing as the financing institutions realized that the PPAs are gradually becoming non bankable. Due to lack of financing not many industrial rooftop SPVs are not being installed, irrespective of the fact that the pay-back periods and IRRs are attractive.

There are various agencies which have been active in financing solar projects

as balance sheet financing, some of these agencies include the government

agencies such as Indian Renewable Energy Development Agency (IREDA), Rural

Electrification Corporation (REC) and Power Finance Corporation (PFC). Apart

from these various public sector and private sector banks State Bank of India

(SBI), Bank of Baroda, and Andhra Bank have been active in financing solar

projects. Some of the large projects have been successful in securing Exim

BANK and ADB financing.


Financing of Rooftop Solar PV

23

Since 2004, regardless of module prices, system prices have fallen steadily as installers achieved lower installation and maintenance costs. The LCOE for rooftop PV systems has declined by nearly 50% in last three years. Most important determining factors of the levelized cost as be-ing capital costs, capacity factor, cost of equity, and cost of debt. Figure-- shows that the level-ised cost of power generated by PV exhibit a particularly high sensitivity to load factor varia-tions, followed by variations in capital cost and financing cost. As solar PV cost has come down heavily in last three years the economics of solar electricity has become attractive to commercial building owners and many domestics & international roof top companies are pitching into install roof top PV system and make it a business case. The sector is taking shape in the form of distribution generation utilities to provide captive power through solar PV to the building owner’s inter-est of commercial building owners as well as industries towards captive solar plants may heavily dent the profits of electricity distribu-

tion companies, as these consumers are high paying consumers which will gradually shift to captive generation. As solar PV will be there captive generation source, the utilities will not be able to charge them the cross subsidies are charge & leave to losses. Rapid decline in cost of solar PV has made it attractive preposition to the rooftop owners to get installed a solar PV system at their roof. This is a win win situation to the hose owner/consumer as well as third party installer and in recent years we have seen the long term third party PPAs are being signed by the third party installers with the large consumers having roof-top and keen to buy the electricity at a price which is at par with the grid price of electricity. There are various factors which affects the eco-nomics of the rooftop solar PV system wchich include the Interest rate, Capital cost, and PLF. These three factors can make or break the prof-itability of any solar project.

Grid Parity Will bring DC electricity

back to homes

If we have solar PV in rooftop system

which is producing DC electricity, then

why there is need to converting it to

AC and then back to DC to run your

electronic and other appliances which

primarily require DC electricity. While

most of our house hold appliances can

run on DC electricity the new homes

which are considering solar as integral

part of their roof top generation can

have DC wiring circuit in their home

and can run their all there appliances

on DC. May be in future the house

hold will have both DC and AC circuits

in their home in order to maximize

solar energy utilization from their

rooftop. Many of the large Data

centers use DC electricity which they

convert from AC electricity, it is

expected some of these data centers

will shift to solar PV and reduce their

AC to DC conversion losses which are

of the order of 15-20%. In US many

universities and hospitals are

experimenting with DC has their

primary energy circuit and AC poor

circuit is considered as backup in case

of non-availability of DC power. Here

are the few examples already available

in the market DC based appliance.”

Cost of Generation vs. Average electricity procurement price


Economic Viability

24

Solar Rooftop Leasing


Germany is the largest installer of

rooftop PV systems and the typical

sizes of roof top systems are in the

range of 10kW -50kW systems. A 50

kW rooftop system typically produce

about 250 kWh in a day. The typical

lease rentals for rooftops are of the

order of about €1.00 / sqm / year.

Many solar developer offer a prepay-

ment of full 20 year lease in advance

and get the rooftop space on lease at

a lower cost. .

On one side there is a growing interest on large scale solar power projects of MW size in the

investors, there are investors who are also focusing on the smaller segment of rooftop solar

systems, where you can install solar PV system on your roof and use it for your own purpose

and surplus electricity can be sold to the grid. While there is already a capital subsidy of 30%

from MNRE for off grid PV systems, the grid connected systems can get a preferential tariff

(Feed in Tariff) or the REC9 Renewable Energy Certificates) for sale of their electricity to the

grid. Even your self consumption is also considered as the deemed generation for the consid-

eration of feed in tariff.

The rooftop owners having roof top sizes in the range of 30000 -10000 sq. The ideal rooftop

should be flat and relatively free of obstructions, and should have good exposure to sun. While

there is a regular power cuts to the households, the solar rooftop systems are ideal way to the

home owners to go for the rooftop solar PV systems. The major barrier is the high upfront cost.

In-order to overcome this, the home owners can explore the feasibility of rooftop solar PV sys-

tems on their roof, through the third party installers. A growing number of third-party solar

power providers are looking to rent roof surfaces from the home owners and install PV systems

and sell the power generated to the home owner/local utility through the different available

scheme of solar rooftop policies of government of India. Even commercial building owners can

also lease their rooftop on rent to the solar PV developers and can do a long term PPA to use

the electricity generated through the PV system.

Most rooftop solar developers require an option to lease the rooftop. The option will permit the

operator to have access to inspect and test the rooftop and do such other investigations as it

deems necessary to satisfy itself that the location is suitable for a solar PV array and that the

building owner is in a position to grant a lease to it. The option will be open for exercise by the

operator for a period sufficient to enable the operator to conduct such inspections and investi-

gations and to apply for and obtain a Feed in Tariff (“FIT”) program approval or enter into a

power purchase agreement (“PPA”) with the local electrical utility. The option agreement will

provide that if the developer exercises its option, the parties will enter into a lease of the roof-

top area on the terms set out in the option agreement.

Generally the rooftop lease is signed for 20 years (to match the term of the FIT or PPA) and the

tenant/installer will most likely ask for the exclusive option to renew the lease. Renewal rights

are potentially important, as it is anticipated that the productive life of the solar photovoltaic

(“PV”) array equipment may be substantially longer than 20 years. Rent can be structured in

several ways. Usually, it will be a fixed, all-inclusive “gross” rent, but it may be calculated based

on the size of the roof area or the portion of the rooftop utilized, the wattage produced by the

facility, a percentage of the revenues received by the tenant, or on some other basis. In addi-

tion, the lease may provide for the tenant to pay for its electricity consumption and for any

realty taxes associated with the solar PV array.

25

Grid parity occurs when the Cost of Genera-tion from conventional sources of energy becomes equal to the COG of solar power. COG mainly depends on the cost of mod-ules (around 50% of the total plant cost) and balance of system (BoS) (Inverters, Cables, Mounting structures etc). Solar cell manufacturing industry has drastically decreased the module prices from 2009. The main reason for the decline was over-supply of PV modules, decrease in silicon costs in global market and improvement in module manufacturing processes. In 2009 crystalline module cost 2.5 $/ Wp and in 2012 it was around 0.84 $/ Wp. has set the ambitious target of deploying 20,000 MW of grid connected solar power by 2022. As the cost of module and BoS has de-creased over there years, hence the CoG has also decreased from INR 20/kWh in 2008-09 to INR 8.30/kWh in 2011-12 re-

spectively. It is a forecast that PV module prices will further decrease and in 2016-17 average selling price of module will be around $0.6/ Watt.

It is expected that the COG from conven-tional sources will increase @4 -5% per annum due to increase in raw material prices, increase in cost in setting up a plant. Similarly, the cost of solar power is ex-pected to reduce @5-7% due to econo-mies of scale of module suppliers, im-proving efficiencies of various PV tech-nologies and low cost manufacturing loca-tions.


Solar roof-top system is an efficient solution to diesel generators as it reduces

the operating costs of generating electricity. The power provided is

uninterrupted and supplied throughout the life of the project. On an average,

per unit cost with a diesel generator is Rs 15/- while the cost of solar

rooftop system backed with a battery bank is Rs 11/unit. While the initial

cost of installation of diesel generator is low as compared to solar rooftop for

the same size, the operational cost of diesel generator turns out to be a lot

more than that of solar roof-top. With solar rooftop system, one can save the

cost of transportation, pilferage and storage of diesel.

Approaching towards grid parity

26

Since 2004, regardless of module prices, system prices have fallen steadily as installers achieved lower installation and maintenance costs. The LCOE for rooftop PV systems has declined by nearly 50% in last three years. Most important determining factors of the levelized cost as being capital costs, capacity factor, cost of eq-uity, and cost of debt. Figure-- shows that the levelised cost of power generated by PV exhibit a particularly high sensitivity to load factor variations, followed by variations in capital cost and financing cost. As solar PV cost has come down heavily in last three years the economics of solar electricity has become attractive to commercial building owners and many domestics & international roof top companies are pitching into install roof top PV system and make it a business case. The sector is taking shape in the form of distribu-tion generation utilities to provide captive power through solar PV to the building owner’s interest of commercial building owners as well as industries towards captive solar plants may heavily dent the profits of electricity distribu-tion companies, as these consumers are high paying consumers which will gradually shift to captive generation. As solar PV will be there captive generation source, the utilities will not be able to charge them the cross subsidies are charge & leave to losses. This situation can be compared with telecom sector where in BSNL was the only service pro-vider having landline everywhere and advent of mobile telecom solutions and internet teleph-ony made the visibility of BSNL landline solu-tion invisible. Although solar PV do not provide

the complete solution, but the shift of consum-ers towards captive generation and advance-ment of electricity storage system will make consumer’s independent to utilities Utilities are already experiencing significant losses as most of the large consumers are shift-ing towards open access category and sourcing cheaper electricity through a solar project un-der a bilateral PPA. Commercial consumers need not to do investment of their own in solar PV as there are plenty of investors want to explore these opportunities under a rooftop lease model. The enforcement of solar pur-chase obligations by the states i.e. Tamil Nadu has change the dynamic of rooftop solar eco-nomics. PPAs were signed with a rooftop in-stallers at the rate of 7 Rs/unit, which is a typi-cal retail tariff for commercial consumer cate-gories. Top of this the roof top installer can avail benefits i.e. REC as well as Accelerated depreciation which makes it win-win situation to the roof top installers as well as to the build-ing owner. Many utilities are discouraging open access as well as net metering options in order to differ the solar PV installations in these building and keep the commercial consumer base intact with them. It won’t be possible for utilities to hold these policies decision for long time and the utilities need to deal with this situation as the rooftop solar PV market evolves. Then it is still unclear how utilities will deal with this situation wherein the only option left is agricul-ture & domestic consumers which are heavily subsidies due to various political reasons.


Future Outlook

27

Firstgreen provides consulting services in the

area of Renewable Energy, Building Energy

Efficiency, and Climate Change. We are one of

the leading consulting firm in the field of Solar

PV projects in India and have been involved in

MW class grid connected as well as Rooftop

Solar projects. We have provided Project Man-

agement consulting, Design and Engineering

services for over 200 MW of solar projects

since 2010 of which about 100 MW is already

being commissioned and balance is under vari-

ous stages of development.

We provide various services to the client right

from the inspection of project, Design and Engi-

neering support, Policy and Regulatory support,

financing support and strategic business advi-

sory to our clients.

Firstgreen has been conducting training and

capacity building programs for solar, wind and

building energy efficiency projects in India and

abroad. Our training programs has been widely

attended by senior management of various

organizations which provide hands on experi-

ence and step by step approach to implement

solar, wind, and building energy efficiency pro-

jects.

We believe in sharing our knowledge through

technical articles on our blog

(www.firstgreen.co/blog). So far we have pub-

lished around 680 articles which reflect our

experience i policy, technology, financing, and

project management. Our blog is visited by 64

countries in the world and having footfall over

1,40,000 people across the globe..


Renewable

Energy Eff iciency

Climate change

About Firstgreen Consulting

Documents

Rooftop Solar Markets