Beehives, Elephants, 220,000 Jobs, & The Future Of Solar Rooftops In India
Last week, the talk of the solar town in India was a webinar organized by Bridge To India — a New Delhi–based solar market intelligence firm, in partnership with Tata Power Solar. The webinar was attended by around 200 professionals from across the solar sector. The webinar discussions revolved around a report, How should India drive its solar transformation? Beehives or Elephants — which was released sometime back.
The report provides a comparative analysis of four distinct scenarios of solar power generation in India – residential rooftops, industrial/commercial rooftops, utility-scale projects, and ultra-mega projects. These differently sized solar options are also talked of as bees, pigeons, horses, and elephants, respectively.
We had discussed the key findings of the report in a previous post. You can find the full report here (you need to fill in a form before you can download it). There is also a cool infographic if you are in a hurry.
What came out strongly was the confidence the attendees felt in the growth of rooftop solar in India. Below is a screenshot of a poll conducted during the webinar which reflects this opinion.
More than ¾ of the attendees voted for rooftop solar (residential and commercial combined) as the segment which will drive solar power in India. In the short term however, all eyes seem to be focused on commercial/industrial rooftops (which secured almost half of the votes). This is completely at odds with the current scenario in the Indian solar market, where only utility-scale and ultra-mega solar plants are talked about.
Rahul Gupta, the 27-year old founder of solar EPC “Rays Power Experts,” which has executed more than 110 MW of solar PV projects, makes an important point. “Big orders of 50 megawatt and above are bagged usually by bigger players. The likes of us depend for almost 80–90% of revenues on small investors in this (i.e. solar) upcoming sector,” he said in an interview with The Economic Times.
While ultra-mega solar plants (the elephants!) have been making big news, it seems difficult to imagine that smaller solar players would be getting any part of the pie. This, combined with the high price industry and commercial establishments have been paying for unreliable electricity, makes commercial rooftops an instant gold mine for smaller players.
As the chart below shows, LCOE of utility-scale solar is better than grid in a number of states — without any aid at all. If you combine only the accelerated depreciation (AD), which is allowed under Indian tax laws, solar becomes viable in almost all major industrial states. Even though subsidy can theoretically help make solar more feasible, no one is keen to take that road. Here is why.
The report released by Bridge To India notes that commercial rooftop solar installations will reach generation cost parity with imported coal by next year. Also, in a best-case scenario, the LCOE for utility-scale solar and commercial rooftops (in the range of 10-500 kW) are expected to level up by 2024.
In making these predictions, the report makes an important distinction between LCOE and Landed Cost Of Power (LCOP). The latter being the actual cost of electricity for the consumer, which along with generation costs, also accounts for the cost of grid balancing and upgrading, smart meters, and theft. The difference between LCOE and LCOP is estimated to be as high as INR 2/kWh for utility solar and INR 0.2/kWh for rooftop.
Even now, utility-scale solar has an average price of INR 6.6/kWh, and a landed cost of INR 8.4/kWh, which is the same as imported coal, and which is why this made news.
But complicated energy cost computations are just one thing; there is another positive reason to push the growth of solar rooftops — for jobs. Commercial rooftops are likely to create 220,000 jobs all by themselves over the next decade in India. Add to this another 320,000 jobs from residential rooftop solar. Utility-scale solar and ultra-mega solar plants, on the other hand, will only add 134,000 jobs during the same period.
However, the road ahead is still hazy. Tobias Engelmeier of Bridge To India clarifies that large-scale deployment of commercial rooftops is still somewhere on the horizon because the “ecosystem is not there yet.” But commercial rooftops will help to build a self-sustaining solar market, he adds.
Thanks to the high cost unreliable electricity access brings to commercial users in India, it all boils down to reliable policy support and providing the users access to inexpensive capital. Only now have the states started opening up to net metering, but there are still several challenges ahead for the creation of the right enabling policy environment. India is also in talks with major banks to secure a low-cost loan exclusively for rooftop solar.
A big bright solar future journeys through one roof at a time. Now lets see if everyone will put their money where their mouth is.
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