Building Essence For Life

Benefits of Solar Power Plant


Frequently Asked Questions for Grid Connected Solar Rooftop Systems
1. What is a Solar Rooftop System?
In a solar rooftop system, the solar panels are installed in the roof of any residential, commercial, institutional and industrial buildings. This can be of two types (i) Solar Rooftop System with storage facility using battery, and (ii) Grid Connected Solar Rooftop System.

2. What is a Solar Rooftop System with Storage facility?
Such rooftop system has battery as storage facility. The solar electricity is stored in the battery and can be utilized during night also when the sun is not available.

3. What is a Grid Connected Solar Rooftop System?
In grid connected rooftop or small SPV system, the DC power generated from SPV panel is converted to AC power using power conditioning unit and is fed to the grid either of 33 kV/11 kV three phase lines or of 440/220 Volt three/single phase line depending on the capacity of the system installed at institution/commercial establishment or residential complex and the regulatory framework specified for respective States.
These systems generate power during the day time which is utilized fully by powering captive loads and feed excess power to the grid as long as grid is available. In case, where solar power is not sufficient due to cloud cover etc., the captive loads are served by drawing power from the grid.

4. Where such plants can be installed?
Such rooftop systems can be installed at the roofs of residential and commercial complex, housing societies, community centers, government organizations, private institutions etc.

5. What is the average cost of grid connected rooftop solar systems?
The average cost of grid connected rooftop solar systems is about Rs. 80 per watt or Rs. 8.0crore per MWp capacity.

6. What is the Financial Assistance provided by the Ministry?
There is a provision of Central Financial Assistance of 15% of the total cost or Rs. 12 per watt or Rs. 1.20 crore per MWp under the Grid Connected Rooftop and Small Solar Plants Programme of the Ministry. This CFA has been reduced from 30% to 15%.

7. What are the other fiscal incentives are available for Solar Rooftop Systems?
There are provisions of concessional import duty/excise duty exemption, accelerated depreciation and tax holiday for setting up of grid connected rooftop power plants.

8. What efforts Government is making to providing loans for solar rooftop systems?
Department of Financial services has instructed to all Public Sector Banks to encourage home loan/ home improvement loan seekers to install rooftop solar PV plants and include cost of system in their home loan proposals. So far, nine PSBs namely Bank of India, Syndicate Bank, State Bank of India, Dena Bank , Central Bank of India, Punjab National Bank, Allahabad Bank, Indian Bank and Indian Overseas Bank have given instructions to extend loan for Grid Interactive Rooftop Solar PV Plants as home loan/ home improvement loan.

9. What is the size of grid connected rooftop solar system?
The rooftop solar systems from 1 kWp upto 500 kWp or in combination can be set up on the roofs.
10. How much roof area is required to set up the grid connected rooftop solar system?
About 10sq.m area is required to set up 1 kWp grid connected rooftop solar system.

11. What are the advantages of Grid-Connected Rooftop Solar System?

  • Electricity generation at the consumption center and hence Savings in transmission and distribution losses
  • Low gestation time
  • No requirement of additional land
  • Improvement of tail-end grid voltages and reduction in system congestion with higher self-consumption of solar electricity
  • Local employment generation

12. What is the potential available in India?

According to a study conducted by TERI, a potential of 124 GWp SPV Rooftop plants has been estimated in the country. This can be achieved through active supports from the States.
13. Net metering
The grid connected rooftop system can work on net metering basis wherein the beneficiary pays to the utility on net meter reading basis only. Alternatively two meters can also be installed to major the export and import of power separately. The mechanism based on gross metering at mutually agreed tariff can also be adopted.
14. Feed-in-Tariff
In feed-in-tariff the Government offers a tariff for purchase of the solar power generated from such plants.

15. Among net metering and feed-in-tariff what is preferred?
Net metering mechanism is more popular among States.

16. In case of grid failure, is there any chance for shocks to the person who is repairing?
In case the grid fails, the solar power has to be fully utilized or stopped immediately feeding to the grid so as to safe-guard any grid person/technician from getting shock (electrocuted) while working on the grid for maintenance etc. This feature is termed as ‘Islanding Protection’.

17. What are requirements from State to promote grid-connected rooftop solar systems?
(i) States should have conducive solar policy to allow the grid connectivity.
(ii) State Regulators have issued tariff order for appropriate tariff, net-metering/feed-in tariff and the grid connectivity, and
(iii) The Distribution Companies agree to allow grid connectivity and purchase the electricity on feed-in-tariff or through net metering arrangement.

18. How many States have policies to promote grid-connected rooftop solar systems?
So far, 13 States/UTs namely Andhra Pradesh, Chhattisgarh, Delhi, Gujarat, Haryana, Karnataka, Kerala, Punjab, Rajasthan, Tamil Nadu, Uttarakhand, Uttar Pradesh and West Bengal have notified policies that include promotion of grid connected rooftop solar systems with net metering. Regulation from the State Electricity Regulatory Commission is also required to allow net metering/ feed-in-tariff.

19. How many States Regulators have notified orders to promote grid-connected rooftop solar systems?
20 State/UT Regulators from Andhra Pradesh, Chhattisgarh, Delhi, Gujarat, Haryana, Karnataka, Kerala, Odisha, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh, Uttarakhand and West Bengal, Andaman & Nicobar, Chandigarh, Dadra & Nagar Haveli, Daman & Diu, Lakshadweep, Pondicherry and Goa have so far issued these regulations for net-metering/gross metering.

20. What is the present status about sanctions under the grid connected rooftop solar programme?
The Ministry has so far sanctioned 361 MWp aggregate capacity of grid connected rooftop solar systems in the country of which 42 MWp have been commissioned.

21. What are the grid connectivity levels for such systems?
The Projects under these guidelines fall within two broad categories i.e.(a) the projects connected to HT voltage at distribution network (i.e. below 33 kV) (b) the projects connected to LT voltage i.e. 400/415/440 volts (3-phase) as the case may be or 230 volts (1-phase). Accordingly, the projects may be under the following two categories.
Category 1: Projects connected at HT level (below33kV) of distribution network
The Projects with proposed installed capacity of minimum 50 kW and upto 500 kW and connected at below 33kV shall fall with in this category. The projects will have to follow appropriate technical connectivity standards in this regard.
Category 2: Projects connected at LT level (400 Volts-3 phase or 230 Volts-1 phase)
The Projects with proposed installed capacity of less than100kW and connected of the grid at LT level (400/ 415/ 440 volts for 3-phase or 230V for1-phase) shall fall within this category.

22. What are the business models that can facilitate the promotion of grid connected rooftop solar systems?
There can be many possible business models, some of which can be considered are as follows:
(a) Solar installations owned by consumer
i) Solar Rooftop facility owned, operated and maintained by the consumer(s).
ii) Solar Rooftop facility owned by consumer but operated and maintained by the 3rd party.
(b) Solar installations owned, operated and maintained by 3rd Party
If the 3rd party implements the solar facility and provides services to the consumers, combinations could be:
i) Arrangement as a captive generating plant for the roof owners
The 3rd party implements the facility at the roof or within the premise of the consumers; the consumer may or may not invest as equity in the facility as mutually agreed between them. The power is then sold to the roof owner.
ii) Solar Lease Model, Sale to Grid
The 3rd party implementing the solar facility shall enter into a lease agreement with the consumer for medium to long term basis on rent. The facility is entirely owned by the 3rd party and consumer is not required to make any investment in facility. The power generated is fed into the grid and the roof top owner gets a rent.
(c) Solar Installations Owned by the Utility
i) Solar installations owned operated and maintained by the DISCOM
The DISCOM may own, operate and maintain the solar facility and also may opt to sub contract the operation and maintenance activity. The DISCOM may recover the cost in the form of suitable tariff. The electricity generation may also be utilized by DISCOM for fulfilling the solar renewable purchase obligation.
ii) Distribution licensee provides appropriate viability gap funds
The DISCOM may appoint a 3rd party to implement the solar facilities on its behalf and provide appropriate funds or viability gap funds for implementing such facility.

23. What is the gross potential of solar power in the country?
India is endowed with vast solar energy potential. About 5,000 trillion kWh per year energy is incident over India’s land area with most parts receiving 3-5 kWh per sq. m per day. Based upon the availability of land and solar radiation, the potential of solar power in the country has been assessed to be 750 GWp.





Benefits of Solar Plants

Solar power will become one of the biggest contributors to India’s huge appetite for power, as the country and its economy grow steadily to become a developed nation. The benefits of using solar plants can be summarized as:

Scalable : No other form of power generation technology is as scalable as solar power. While the other forms of power generation technologies often have a fixed capacity potential where variation is not possible, solar power offers this advantage; the smallest plant can be as small as 0.5 KW and largest plant can be 500 MW(+).

Modular: Solar power plants can be designed in such a way that they can be upscaled of downscaled depending on the energy needs.

Replacement: Being modular, the cost of faulty parts is very low as compared to other power generating plants.

Ease in shifting: A solar power plant can be easily shifted from one place to another and thus ensures ease in the installation process. When compared to other forms of renewable segments this is an added benefit, as shifting a wind or hydel power plant is almost impossible.

Boon for Investors:There are two types of investors in solar power plants: corporate who have a big tax liability, and high net income (HNI) individual or groups as an energy asset class. Owning a solar power plant is beneficial for corporates having a high tax liability as, it allows 100 percent depreciation, which is a very good option for tax planning. Besides, solar power plants prevail as an boon for HNI, as income from solar plants are eligible for tax free income under section 80(I)A. This ensures a positive return which is almost fixed in nature. Till date, Ujaas Energy Ltd has commissioned more than 60 MW in four solar parks, all based in state of Madhya Pradesh. Almost 30 companies have already gained benefits and we are gaining more positive inflow with the growing reach of awareness about the utilization of this model. The model also persists as an economic beneficiary, wherein 65-70 percent of funding is easily available for solar projects from banks and financial institutions.

Cost Effectiveness & Land Procurement

The concept of installing solar panels is often misunderstood and a myth of high cost involvement is often associated with it. However, with the solar power almost achieving grid parity, a little push from the government for a couple of years can make this sector effectively self-sustainable. Ujaas is constantly involved in spreading awareness at all possible forms. The issue of land procurement is often a topic of grave importance, not just for the solar sector but for any business activity. Ujaas takes this in a very holistic way and compensates landowners by giving a fair price.

 Need for Effective Policy Frameworks

Though India has implemented a comprehensive policy framework for solar energy, a need to execute these policies and plans into practice for reaping the benefits still remains unmet. Power being a state subject; it is now the responsibility of the states to take the initiative. While some states are aggressively in line with central policy, few are catching up and some are yet to start. Power is a crucial element and is an essential aspect in meeting the infra-construction demands of any economic activity. Hence, an active approach from the government becomes of core importance for the growth of this sector.

2013 saw a sluggish growth for the solar sector, a major reason being the lack of effective push from the government, particularly in the implementation of renewable purchase obligation (RPO). Willingness and positive approach from the governing body is an essential for all renewable power resources to flourish effectively. This is applicable not just for developing countries like India but for any country in this globe. For instance, solar power segment in Germany enjoys a prospective presence, due to the government’s aggressive participation and policies like the feed in tariffs.

The other need of the hour is implementation of net-metering policy and regulation policies. Being a tropical country, India is blessed with good sunlight in most part of its topography; hence a need prevails to effectively tap in the potentials of this renewable resource. However, the need of the hour is net-metering policy and regulation policies. Reviewing the prevalent potentials, we anticipate solar power segment to be the real game changer.