Sun could shine on solar energy

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: Sustainability and the reduction of greenhouse gases are two important issues that confront all countries. Thermal power from fossil fuels is now sought to be replaced as far as possible with hydro, nuclear and renewable energy.

However, large hydro projects of the storage type cause an adverse impact on ecology, nuclear power plants are yet to overcome apprehensions over the final disposal of spent fuel, and renewable energy is either not available on demand or techno-economic issues have yet to be overcome for commercial viability. These drawbacks are miniscule compared to the threat from fossil fuels. In the basket of renewable resources of energy, except solar photo voltaic (SPV), the others are very close to commercialisation.

SPV is, however, cheaper in off-grid and remote locations, due to either the high cost of extending the grid line or limitation of technical feasibility and unavailability of local resources for power generation. SPV power is spreading in remote rural areas as domestic lighting systems and for stand-alone off-grid distribution for specific areas. In the urban areas, where large-scale application is possible and necessary, SPV systems suffer from the constraints of high cost.

To encourage SPV, feed-in tariff has been introduced in developed countries, which ensure the purchase of energy by grid authorities at higher than general tariff from entrepreneurs setting up grid-connected SPV systems to meeting domestic requirements and/or sale to utilities. Feed-in tariff for renewable resources like wind, small hydro and biomass energy is in force in many states with notifications from State Electricity Regulatory Commissions.

It is likely that feed-in tariff for

SPV grid connected systems (SPV-GCS) would also be introduced soon in urban areas where power consumption is substantial, to stimulate the growth solar power. With more applications of SPV devices and R&D, technology will improve efficiency and together with bulk consumption, the price will fall.

Depending upon the number of modules arranged in series and parallel, SPV arrays can generate 1 kw to 2 mw, if not more, for linkage with a grid. Going by the market rate, the cost of an SPV-GCS will vary between Rs 22-25 crore per mw. Small, rooftop units (1-3 kw) cost less than a set-up requiring large tracts of land and buildings for the control room and services. This capital cost is no doubt about five times that of thermal power plants costing around Rs 4 crore per mw. As such, SPV systems need subsidy which, along with nominal expenses on operation and maintenance, low interest and liberal depreciation charges, keeps cost per unit within the Rs13-20 per unit range, depending upon subsidy and rate of interest, against Rs 4 for conventional grid power that includes the high cost of fuel. The cost of SPV will fall further by about Re 1 considering its eligibility for CDM benefit under the Kyoto Protocol.

For an SPV system that accounts for 1% of the country’s power system network comprising nearly 1,32,000 mw of installed capacity and 1,00,000 mw peak demand, it will be necessary to set up an SPV-GCS of about 130 mw. This will be feasible only with a capital grant or soft loan, or both, besides reasonable feed-in tariff so that entrepreneurs can expect payback within a reasonable period. Feed-in tariff will be three to four times the normal, but it will result in a very minor impact in the overall tariff structure considering total generation from SPV at PLF of about 40% of thermal power and only one-tenth in installed capacity.

The tariff rise will be close to only 1%, which can be shared by the grid utilities and the consumer, to be decided by SERCs. The implications of reducing the cost of SPVs and, thereby, arresting greenhouse gases, are few—but the significance is great. These are attempts, which, in due course, will be tantamount to bringing down the cost of solar power to affordable levels in a decade or so.

Globally, in the installation of 135 gw of renewable energy resources, 7 gw is SPV power, which represent about 2%. In India, out of 10,000 mw (10 gw), SPV-GCS is only 3 mw or 0.03%, which only reflects our backwardness in this field. In wind power, on the other hand, India is the 4th largest global player with 7 gw (7,000 mw) or 9% of world installation of 80 gw. The country is progressing fairly well by advancing overall growth of renewable energy resources to 25-30%, except for grid-connected SPV systems.

The main obstacle to SPV systems is the high cost of finance and imported solar cells, the main ingredients to making modules/arrays and which constitutes 65-70% of the SPV-GCS cost. By setting up manufacturing units in the country based on advanced technology, this problem can be substantially eased. Research on developing cheaper solar cells is progressing. Internationally, there is gap between supply and demand, which is a key factor in pushing up prices. But prices might soften with a number of new units of highly efficient quality coming up in different countries over the next year.

The potential of solar power in India is much higher than that of developed countries. Harnessing this potential will ensure clean, convenient and competitive power. Despite high costs, initiatives for solar power will yield a favourable result, especially in the context of the high price of oil and threat of global warming.