Solar power projects: Rising costs could muddy the waters

Shortage of water, used to clean panels, is casting a shadow on the profitability of several solar projects

Cleaning of panels can account for 25-35% of the total operational and maintenance costs
Cleaning of panels can account for
25-35% of the total operational and maintenance costs

It’s the little-known challenge being faced by solar projects in India. Keeping solar panels up and running requires cleaning them every fortnight, water for which many developers are finding hard to procure. It is not a coincidence here that most solar plants are located in arid areas.

With solar developers having compromised on their margins by quoting low tariffs to bag projects, the rising costs of water threaten to further hurt the profitability of several projects. Some solar developers in Rajasthan have seen water costs almost doubling in 3-4 years. In Karnataka, tariff for industrial water usage was hiked by 100 times in 2018. Significantly, cleaning costs can comprise 25-35% of the operational and maintenance costs of a plant.

According to a study by Bridge to India, a renewable energy research firm, about 60% of the water used for solar panels is procured through bore-wells. For plants which use surface water, the annual cleaning cost can be as high as Rs 1 lakh for every MW of installed capacity.

The study recorded ‘very high’ water consumption at plants in Rajasthan, UP, Gujarat, Punjab and Haryana, where a quarter of India’s installed capacity is located. Tamil Nadu (TN), Karnataka and MP — with 38% of solar plants—have ‘high’ water consumption levels.

Many developers are reportedly resorting to illegal means to procure water. “To promote solar power, a number of environmental checks and balances are waived and there is often no cap on the water that can be used to clean panels,” Vinay Rustagi, MD of Bridge to India, tells FE. “This is also leading to illegal water extraction at a number of places,” he says.

“In the push for installation, the issue of water usage was not a priority for policymakers,” an industry veteran says. “There is no specification on the means of sourcing water in auction documents and parks owned by big companies often outsource panel-cleaning tasks to contractors who exploit the situation,” he says — villagers in TN’s Kamuthi taluk protesting over an Adani park’s water consumption was a fallout of this phenomenon.

At the same time, there are states that have relied on additional channels to meet such needs. “As a part of development of solar parks in Madhya Pradesh, a detailed study of the catchment and drainage pattern is conducted,” says Manu Srivastava, principal secretary, new and renewable energy, MP. “The purpose is to identify places from where water can be impounded and used for a solar park,” he points out.

Shashi Shekhar, vice-chairman, ACME Group, says that to cut panel-cleaning costs, his company has installed robots with soft linen brushes at its solar parks in Rajasthan’s Bhadla and Madhya Pradesh’s Rewa. Agreeing that water availability is becoming a concern, he says, “there is a plan for setting up a 500-km water pipeline from a desalination plant in Gujarat’s Bhuj to Rajasthan.”

Given that solar capacity stands at 23 GW at present, as against the target of 100 GW by 2022, the challenge faced by solar plants on account of water shortage is only likely to intensify over time, necessitating a coherent policy on the issue.

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.