Solar energy as a viable alternative to the current fossil fuel driven power generation is a well established fact. The biggest differentiator of solar with respect to any other form of energy, renewable or non-renewable, is its extreme scalability and adaptability. Solar energy can be generated from a micro scale of 1 kW to GW level ultra-mega scale solar plants. Also, solar plants can be set up at the point of consumption. This uniqueness makes solar not only a compelling option for India, but also an agent of social and economic change. In a joint report with BRIDGE TO INDIA we have deliberated on how India could drive its solar transformation (download the report here).
- India can generate as much as 145 GW of solar by 2024
- The government should put more emphasis on distributed solar to allow it to thrive next to the grid connected plants
- We should look at the merits of distributed generation in terms of the landed cost of power (LCOP) at the point of consumption, instead of the levelized cost of electricity (LCOE) at the point of generation
Currently, while India’s focus on solar is increasing, what is largely missing is a clear and long-term strategy on how to marry the various advantages of solar to solve some of India’s critical and endemic energy problems.
Given the extreme flexibility that solar offers, is there a way we, together, can implement solar in India so as to achieve maximum impact?
While the government is focusing on solar, most of its effort is towards centralized power generation. Though this is a good route to reduce cost of power, on its own it will not be sufficient to tap the full potential of solar. A healthy mix of centralized and distributed solar generation is needed.
It is important to understand the merits of distributed generation by looking at landed cost of power (LCOP) instead of the levelized cost of electricity (LCOE) at the point of generation. This yields interesting insights. For example, while the LCOE of utility scale solar plants is lower, we find that getting it to the point of consumption adds about 25% additional cost. This, in comparison, makes distributed generation on large rooftops quite attractive.
Distributed and centralized generation have their own merits and demerits. Distributed projects minimize all grid related costs and improve energy access. They are also faster and easier to set up. On the other hand, larger projects bring down capital costs because of scale benefits and are better able to attract finance (both equity and debt). These generation routes rank differently on various parameters such as the cost of power, the speed of deployment, the infrastructure requirements and, most importantly, the employment generation potential.
Due to its very quick implementation time, we need to focus more on distributed solar generation, which can soon start to contribute to ameliorating the growing power deficit across the country. Also, installation and maintenance of solar rooftops is an excellent employment generator. Interestingly, of all the routes through which solar power can be generated, rooftop has the highest potential to generate jobs.
The key question for us is: “How do we get the lowest landed cost of solar power while deriving the maximum socio-economic impact?” Or, to put it metaphorically: “Do we want beehives or elephants?”
This is a guest blog article by Ajay Goel. Ajay is CEO of Tata Power Solar, India’s largest integrated solar company with 25 years of deep domain expertise.