Energy from the sun can be harnessed primarily by two methods—solar thermal and photovoltaic or PV. In the former, energy generation results from the conversion of solar energy into heat energy. The solar thermal method uses sunlight to heat up working fluids, such as hot water, hot air, and steam that can be set up for meeting numerous applications in different sectors, including power generation on a large scale, space heating, space cooling, solar water heating, solar cooking, and more (Solar Energy Corporation of India Limited, 2017).
The PV energy conversion on the other hand is the transformation of solar energy into electricity. This method directly converts the sun’s light into electricity using semiconductors such as silicon. The conversion of the energy into direct current (DC) is known as the photovoltaic effect. The energy thus generated can then be used in several ways. It can be used directly to run DC devices—solar lanterns, domestic lights and pumps; or can be converted into alternating current (AC) to run the regular devices or to be stored in batteries for future use. These devices are particularly useful in areas that still are still not connected to the national grid or suffer from erratic electricity supply.
Emergence of renewable energy
The two oil shocks of the 1970s led the government of India to recognise new and renewable energy as a key to energy self-sufficiency. The Commission for Additional Sources of Energy (CASE) was formed within the Department of Science and Technology in 1981 with thrust on research and development in the area of new and renewable energy sources. In 1982, a new department was created in the then Ministry of Energy called the Department of Non-conventional Energy Sources (DNES), incorporating CASE. In 1992, DNES became the Ministry of Non-conventional Energy Sources to be renamed as the Ministry of New and Renewable Energy (MNRE) in 2006 (Ministry of New and Renewable Energy, 2017b).
The Electricity Act of 2003 was the first dedicated legal framework in India to promote renewable energy. This act put the responsibility of setting tariffs and promoting generation of renewable energy upon the Electricity Regulatory Commissions. The next important milestone was the National Action Plan on Climate Change (NAPCC) released on June 30, 2008, which outlined eight national missions focusing on climate change—adaptation and mitigation, energy efficiency and natural resource conservation. One of the eight missions was the National Solar Mission. The Indian Renewable Energy Status Report (Arora, et al., 2010) listed the following factors in favour of renewable energy expansion in India:
- India has abundant, untapped renewable energy resources;
- Use of indigenous renewable resources will reduce dependence on imported fossil fuels
- Renewable energy offers a hedge against fossil fuel price hikes and volatility
- Off-grid renewable power can meet demand in remote areas not connected to the grid;
- Renewable energy can be supplied to both urban and rural poor;
- Renewable energy can support attainment of India’ climate change goals;
- India intends to play a leading role in the emergent global green economy.
At present, renewable energy is used in the form of solar, wind, biofuel and small hydropower in India. As far as the solar technologies are concerned, many households have benefitted from the devices run directly by PV energy. Amongst these, home lights and solar lanterns have been particularly important. Uttar Pradesh, Tamil Nadu, Rajasthan, Andhra Pradesh, Sikkim, Jammu & Kashmir, Uttarakhand, West Bengal, Jharkhand and Arunchal Pradesh are among top ten states where households benefitted from distribution of solar lanterns, solar home lights and solar pumps during 2007-2017. Though number of SPV installed showed a significant increase during 2007-2012, the figures decreased during 2012-2017 (Indiastat).
Rooftop Systems in India
PV technology is an important innovation towards the decentralisation of solar energy setups since it can contribute towards rooftop installation of solar panels. The biggest advantage of PV technology is that it is modular—made out of a set of separate parts that can be joined together to alter the size and scale of the product. It allows for the emergence of multiple market segments (individual consumer, small business, large enterprise, utility-scale and off-grid). Additionally, each unit of energy that is generated at the point of use itself can offset the unit of energy that would otherwise have to be generated a long distance away and need to be transported to the user, increasing the chances of transmission-distribution losses.
However, although decentralised, not every rooftop is eligible for an installation. Out of the total built up area in a city, the actual solar-suitable rooftop area is determined after excluding the poorly constructed or unfit building structures, roads, green patches and irrelevant sub categories and parts of the rooftops that are shadow-prone or are obstructed by objects and rooftop structures such as water tanks and storage rooms.
So far, 3044 MWp solar rooftop systems have been sanctioned all over India, whereas an aggregate of only 506 MWp have been installed in residential, industrial, commercial and institutional sectors including government undertakings (MNRE, 2017a). In Delhi, Greenpeace (2013) pinned the actually available solar-suitable rooftop space down to 31 sq km, which could fit approximately 2,557 MW of solar power. However, till the end of 2016, the total installed rooftop solar capacity in Delhi stood at a meagre 35.9 MW (MNRE, 2017a). Forty nine per cent of this, about 1250 MW, was represented by the residential sector. A recent campaign by Greenpeace India called ‘Solar Shakti’ showed that 1,043 residents have willingness to adopt solar panels in Delhi (The Times of India, 2017).
According to Muenzel, et al. (2015), the economic value of a residential PV depends on several factors. These include the cost for initial installation of the system, the cost structure of using energy provided by the grid, the payment structure of feeding energy back into the grid and the coincidence of demand and generation at the point of use. PV generation typically peaks during the middle of the day when incident sunrays are the strongest. However, in most domestic households, energy demands are usually high in the morning and evening, with relatively lower power demand during the day. This gap can be capitalised upon if houses with PV systems can export energy to the grid against a payment in the middle of the day, and purchase energy at standard electricity rates in the morning and evening.
To this end, grid connected solar rooftop systems can be used, in which the energy producer is compensated for the excess energy through either of two systems—net metering or gross metering. In net metering, the meter reading is bidirectional so that the consumer only pays for the recorded amount, which is the drawn energy from the grid minus the excess energy sent back to the grid through transmission lines. In contrast, implementing gross metering requires two meters installed to measure consumption and generation separately. It is also known as feed-in metering wherein all the energy generated from the system is exported to the grid and is separately recorded.
The predetermined payment received in lieu of exported energy is called feed in tariff (FiT).In states where there is a rewarding FiT programme (e.g. Karnataka) or where high levels of energy consumption coincide with a high tariff system, (e.g. Delhi, Mumbai etc), residential solar PV can prove economically viable. Under the Delhi Solar Energy Policy, 2015, the Delhi Electricity Regulatory Commission (DERC) has made provisions and outlined net metering incentives for Delhi consumers to connect their systems with the distribution company’s grid in order to trade surplus energy from renewable sources (Government of NCT of Delhi, 2015).
The Indian government has sanctioned a budget of INR 50000 millions, making provisions for capital subsidy of 30 per cent on grid connected rooftop systems for residential, government, social and institutional sectors (Press Information Bureau, 2015). Some state governments have also outlined policies for providing capital subsidy in addition to the 30 per cent subsidy scheme of MNRE. In spite of numerous government initiatives at the state and national levels, the actual on-ground implementation of such initiatives has remained dismally low.
What are the major reasons behind the paucity of rooftop solar installations?
There are some structural as well as economic obstacles to the uptake of rooftop in India. On the structural side, the problems are posed by the construction practices in the residential sector. It is not uncommon for the solar availability of a rooftop to change within a span of few months depending on the vertical growth of the neighbouring buildings. Unanticipated construction of any kind of object, ranging from rooftop water tanks to an entire building floor can act as a shadowing artefact. Moreover, in cities like Delhi, the unpredictability of the weather, especially the high levels of air pollution in winter, can prove challenging for steady influx of sunlight. Dust swept up by the various sources of air pollution may land on the solar panels and reduce their longevity over time. A recent study by Bergin, et al. (2017) found that the solar energy production can be reduced by approximately 17 to 25 per cent across regions that experience high levels of dust and/or anthropogenic particulate matter (PM) in the air. Examples of such regions include large areas of India, China, and the Arabian Peninsula, where ambient PM and deposited PM on PV surfaces play equally obstructive roles.
This implies recurring maintenance costs in addition to the one time lump sum amount paid at the time of installation. According to one of the companies dealing in solar systems, the annual maintenance costs for smaller Solar PV systems is about 2 per cent of the initial system cost whereas for the larger systems is about 1 per cent of the initial cost (MYSUN, 2017).
Apart from the technical concerns, there is also a lack of enthusiasm amongst people for multiple reasons. The biggest hindrance is the huge initial investment that people will be unwilling to undergo in places where energy demands are already being met by the existing grid at a reasonable rate. TERI (2014) has done a financial analysis for different sized rooftop SPV systems in the residential sector. According to their findings, a household that consumes around 100-150 units of electricity from the grid can typically go for a PV system with a capacity of 1 kWp, which is expected to generate around 116 units monthly. The MNRE (2016) estimated the initial cost of rooftop system to be about INR 75,000 for 1 kWp. TERI (2014) in a previous study calculated the payback period for a solar installation to be around 10 years. The high initial capital cost and the prolonged period for expected return on investment thus work as deterrents. Moreover, there are long term uncertainties that come into question: will the household owner continue to live in the same place? Will their electricity demands increase/decrease drastically over the period? How far will the installation continue to function optimally and can they be rectified immediately? These concerns play major role in influencing adoption of solar power.
The goods and services tax
Another major concern in the solar sector, amongst others, is the impact that the implementation of the Goods and Services Tax (GST) from July 1st 2017 might have on the existing price levels. Under the scheme of GST, all existing indirect taxes, with a few exceptions, would be included under the new taxation regime. The government has fixed a rate of 5 per cent GST on all solar equipment (Business Standard, 2017). Applicable at par across scales, it would result in a significant increase from the erstwhile zero taxation regime. Given the already low uptake of rooftop PV panels at the household levels, the lack of a significant drop in the price may deter the prospective buyers of solar energy that would have a bearing on popularisation of solar energy for the residential sector.
There are multiple incentives for encouraging adoption of solar rooftop systems in India, both at the national and state levels. However, even after the subsidies, the estimated initial cost of rooftop system for households are high. The prohibitive cost coupled with the other structural uncertainties stands in the way of popularisation of solar energy. A study done by G’nY in Dwarka sub-city showed that solar panels are installed only in the planned institutional zones of the area—educational institutions, malls, government and corporate buildings and metro stations. Household usage seems to be a distant dream in the current scenario.