Someday as I was cycling around in Block C, Sushant Lok 1, I noticed a blue color house with rooftop solar panels. I have been around this sector and have not seen it installed elsewhere. I wanted to know more about this system they had; why and how did they do it? I have been following the renewable energy for many years and its development (more on this in later parts). I apprehensively rung the bell. What follows is a small story of what I discovered.
The elderly couple welcomed me inside and offered sweetmeats. Mr Uday (name changed) tells me that by installing the roof top solar panel system he will save money for 25 years. To explain about the panels on his roof he asks me 2 questions. How much do I know about average power consumption (daily and yearly) and usage in homes and the 2 major types of solar installations i.e. On grid system vs Off grid system. These questions are critical he said to decide on the nature and capacity of the roof top system. The solar panels on his roof are used for both systems (separate assets).
Firstly how does a On grid system work? (a) Solar panels produce electricity (DC current) thats converted to AC current using an (b)inverter. This current generated during the daytime is supplied to the electric grid using a (c ) two way meter. Note that this type of system doesn't involve batteries. All of the electricity produced is not used by your building, rather it becomes part of the electric system all around you that anyone may use.
Why install a system where someone else is using this electricity? It felt counter intuitive. How would he save money? Why does he have a separate off grid system? I asked him why couldn't he use the same panels to charge the batteries and use it at home. Mr Uday says that the off grid system is used in the case there is a power cut only. A different set of solar panels (1KW) charge the batteries of the home UPS (commonly known as inverter for homes). This is what almost everyone knows as the proper use of solar panels.
Is it legal?
Yes its completely legal, though with some hassles. The Indian government has come with guidelines (link to haryana state guidelines in 2016) in 2014. Every state distribution company has a nodal agency coordinating technical requirement and subsidy disbursement.
Ok. How does he save money?
To calculate the savings we need to understand the overall electric expenses with and without the system. Keep in mind a time horizon of 4-5 years. With the On-Grid power system his electric bill comes at Rs 20,000/ year. Before the solar panel systems installation his electric bill used to be upwards of Rs 1,40,000/ year. In 2 years he would save Rs. 2,40,000 and in 5 years Rs. 6,00,000. Given that the life of this system is 25 years his net savings would be Rs 1.2L * 25yrs = Rs. 30 Lakh. Caveats- The time value of money isn’t accounted for, or the increase in electric rates/unit w.r.t to inflation. We also don’t account for the degradation of solar panels at 0.7%/ year. Hence the above savings amount is only an indicative assessment.
What is the initial investment?
The system installed at Mr. Udays’ house is a 10 KW on grid system. At the rates prevalent in 2017 it cost him Rs. 6,00,000. Since its a residential unit he qualified for a subsidy by the nodal agency for Renewable Power in Haryana State. The subsidy was sent to his bank account in 3 months time at Rs20,000 per KW; a total of Rs. 2,00,000. Hence at a net investment of Rs. 4,00,000 the payback period for this system is less than 4 years. And he would enjoy the benefits of reduced electric bill for 25 years.
What is the annual maintenance cost?
The system requires little to no maintenance over its lifetime given that good quality equipment is used from reputed EPC contractors. He says that there are several companies in Delhi NCR that provide 25 years warranty for the Solar Panels, 10 years+ warranty for the inverter. With options of subscribing to a Rs. 5000 annual maintenance contract that cover preventive measures and cleaning dust off solar panels using a water pipe(4 times a year). He claims to this by himself.
Wouldn't the roof area be wasted and unusable?
The solar panel system is installed at an angle of ~22 degree to the vertical axis. This can be mounted on superstructures of height 7–10 ft, which leaves plenty of space to walk underneath. Though this would cost Rs. 5-10,000 per KW more. Else the price of Rs. 55,000 per KW is inclusive of a basic mounting structure. He mentions plans of setting up a hydroponic rooftop farm under this solar panel structure in the future. His friend has built a rooftop garden with landscaping space for his kids to play under the solar panel structure. Sometimes only 50% of roof area is enough for the entire space. Approximate requirement of 6 sqm. / KW.
What happens in case of high speed winds?
The system is rated to withstand wind speeds greater than 150Kmph. And hailstones of size upto 30mm. Since the structure is made of Galvanized iron there is no rusting also.
I had run out of questions to ask. But I realized he was just getting started. We had a long and wonderful talk about the benefits and pitfalls of the awakening industry. And possibly a decentralized power utility with uninterrupted power supply at cheaper rates. With the added benefit of reducing the carbon footprint.
He shared data regarding (a)technical specifications of equipment installed (b) weblinks to HAREDA and DBHVN forms for this system (c ) process of applying for the net metering system (d) vendor selection process (e) tips to understand quotation generated by vendor, etc
In Part 2 of this post I will explore the technicalities with respect to feasibility, regulatory requirements, vendor data and industry trends.