Solar can be a win-win for all stakeholders
India is expected to have an energy deficiency of 6.7% in the coming year i.e. 2013-2014. The actual peak demand of power has exceeded the planned production in India for years, causing power outages for the average Indian consumer. The grid infrastructure too collapses at times under the strain of excess electricity loads during peak summer months. The Northern grid failure in 2012 disrupted life in the country and questioned the reliability of the grid infrastructure and load management in the country.
- Consumers (residential, commercial and industrial) can hedge against rising power tariffs and power outages by going solar
- The Indian government can reduce dependency on costly coal imports, reduce emissions and create new jobs
- Solar could create new business opportunities for Indian DISCOMS
As a local, de-centralized source of power, rooftop solar allows consumers to be directly in control of their electricity supply. Consumers can produce and consume their electricity locally, making their electricity supply more reliable and secure. Further, the prices of electricity have increased drastically since 2011, with certain states such as Delhi, Uttar Pradesh and Tamil Nadu hiking power tariffs recently by 20%, 40% and 37%, respectively. With increased costs of fossil based power generation, this trend is likely to continue. Solar prices, on the other hand, have declined globally. System prices have decreased by 47% in the past ten years. Solar prices are expected to further decline at the long-term rate of 5-8% driven by technology improvements. Thus by switching to solar, consumers -residential, commercial and industrial, can hedge against increasing electricity prices.
For large-size commercial and industrial consumers, going solar is also a great way of fulfilling their 2% CSR obligation (mandated as per the Companies Bill 2011) as solar is also one of the few CSR initiatives that also make economic sense for such consumers; it could prove to be cheaper source of energy to meet their electricity needs. For instance, retail apparel store, Shoppers Stop, in Mumbai has installed a 30 kW solar system to promote itself as a ‘green’ company and to hedge against rising costs of power in Mumbai.
Considering the country’s increasing power demand and the rising costs of coal imports, it would also make sense for the Indian government to promote the adoption of solar. Adoption of solar would not only make the country less dependent on the costly imports but would also lead the way for a more sustainable growth. Further, the solar industry is capable of developing an ecosystem that creates jobs for system installers, transporters, project commissioners, system maintainers, grid monitors and power quality controllers. The solar industry has the capacity of creating more than 320,000 new full-time jobs by installing 100 GW of solar power. Considering the current unemployment rate of 3.8%, these new jobs could absorb a considerable amount of the country’s workforce. By focusing on cleaner energy and job creation the Indian government can project itself as a progressive administration to the world.
Finally, DISCOMs are the only stakeholders that may feel threatened by solar or may have concerns related to financial expense or the technical challenges associated with its integration. However, we believe that they should view solar as a business opportunity. With strained fossil fuel supplies, the need of curtailing carbon emissions and rising power demand, the shift to renewables is inevitable. By investing early enough DISCOMS could begin preparing for the future. Solar would, in fact, act as a supplementary source to the existing conventional energy system. Moreover, solar could also provide security in case of grid malfunction. e.g. Jodhpur DISCOM used wind power when the Northern and Eastern power grid failure occurred in 2012.
We believe that solar in India makes sense for all stakeholders. Its adoption will be primarily driven by the increasingly favorable economics of solar and by customer demand, but all stakeholders would actively shape its future by making solar their success too.
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