Electricity Saving Tips For Homes And Offices

Rooftop Solar in Bangalore – Feasibility and Financing

By on November 5, 2016

In our previous post, we gave you basic information on how to think about purchasing, installing and financing a rooftop solar system, including cost-benefit analysis.


Today, we’ll take a deep-dive into the economics of rooftop solar systems in Bangalore, Karnataka. Karnataka is a pioneer state for on-grid rooftop solar. With innovative policies, it was responsible for a huge surge in interest from all sections of society to install rooftop solar plants.

For technical and economic reasons, rooftop solar policy makers prefer to target “prosumers” i.e., consumers of electricity who wish to also produce electricity in amounts comparable to their consumption. Due to the erstwhile lucrative policy wording, a large number of applicants for large rooftop solar plants were found to be minor consumers of electricity. For instance, agriculturalists lined up to set up large “rooftop” plants on open land by constructing a shed. This went against the spirit of the rooftop policy, and rooftop solar electricity producers started looking very much like ground-mounted solar producers (which come under a different policy and have lower buyback rates for sound reasons) A mid-course policy correction was thus inevitable and KERC announced the new rooftop solar tariff and rules in May 2016.

Salient changes in Karnataka rooftop solar policy 2016

  1. Maximum size of solar plant limited to 150% of sanctioned load / contract demand: This is still liberal compared to other states that limit the plant size to the sanctioned load or less.
  2. For residential, educational institutions and hospitals, net metering is no longer applicable. These prosumers will be instead compensated via gross metering: The justification for this shift was that many consumers felt shortchanged by net metering (since consumer electricity tariffs are lower than the solar purchase tariffs) and wished a uniform buyback rate for all the electricity they produced.
  3. Capacity based buyback tariffs: Whereas earlier all consumers got ₹9.56 for every excess unit of electricity generated, new plants will be compensated as per the following tariffs:
Capacity of Solar Rooftop and small PV power plantsApproved Tariff in ₹/Unit (Without Capital Subsidy)Approved Tariff in ₹/Unit (With Capital Subsidy of 15%)
1 to 10kW7.086.03
Above 10kW and upto 50kW6.615.63
Above 50kW and upto 100kW.6.145.23
Above 100kW and upto 500kW5.674.83
Above 500kW and upto 1MW5.204.43

These rates are fixed for the duration of the 25 year Power Purchase Agreement (PPA).

This tariff schedule effectively removes any advantage larger system owners had due to economics of scale, and also ensures the overall financial benefit per unit for subsidized and unsubsidized systems is the same. Also, no subsidy has been disbursed by the state nodal agency KREDL as per our knowledge. We therefore recommend not to pursue the subsidy option.

Sizing considerations

From the above policy, Oorjan recommends the following sizing for your rooftop solar project if you are a residential, educational institution or hospital consumer. You should go with the maximum sized rooftop solar system possible, subject to:

  1. 150% of your sanctioned load (Your sanctioned load is mentioned in kW on your electricity bill)
  2. Available roof area: 1 kW requires approximately 100 sq ft of shade free rooftop space.
  3. If the kW value calculated from 1 and 2 above is close to a capacity tariff tier, round it down to the maximum capacity.

Sample calculation: If your sanctioned load is 10kW, you should consider a system size of 10 * 150% = 15kW. This requires 1500 sq ft roof space. However, if you have only 1100 sq ft space available, the size gets limited to 11kW. Since the tariff changes at 10kW, a 10kW system would be best for you.

Returns Calculation

How much would investing in a 10kW rooftop solar system return on purely financial terms? A 10kW system will generate on average 1250 units of electricity every month. The earnings from selling this energy to the discom (BESCOM / MESCOM / HESCOM / GESCOM / CESCOM) are ₹8,850 per month. Assuming a turnkey project cost of ₹7.72 lakh, this would imply a simple annual return on investment (ROI) of 13.8%, which is quite attractive.

To be conservative, we further assume the following:

  • Panel output degradation of 1% per year
  • Maintenance / wear and tear budget of ₹750 per month with inflation at 3% per year
  • Zero salvage value at the end of the PPA

The internal rate of return (IRR) of the rooftop solar system now reduces to 10.8% per year. This is still a higher ROI than keeping your money in the bank or many other long term investment avenues! In addition, there are the non-financial benefits of going solar, such as contributing towards a greener and cleaner planet.

If you’re in Bangalore and have been thinking about going solar, get in touch with Oorjan (http://oorjan.com), India’s first rooftop solar financing platform. We can help you think through the specifics of your situation. If you already have a price proposal and project design from an installer, send it to us for evaluation and financing. If you are just getting started, we can help you choose a highly rated local installer and obtain financing. Loan approvals for EMI schemes typically take 2-3 weeks, while pay-per-unit agreements take upto 6 weeks. We also provide a user-friendly app to monitor system performance once your project is installed, and provide periodic alerts. Contact  us if you have always wanted to go solar, have questions and/or money was in the way!


This post first appeared on this link

This post is a guest contribution by Oorjan Cleantech, a company that enables solar rooftop financing. It is an initiative by Alums of IIT Bombay having years of experience in Solar PhotoVoltaic Markets. They have an estimator and contact form on their website www.oorjan.com.


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अगर आप के कुछ भी सवाल हैं, वह आप नीचे दिए हुए सवाल-जवाब सेक्शन में पूछ सकते हैं। आप अपने सवाल हिंदी में भी पूछ सकते हैं और हम आपको हिंदी में ही जवाब देंगे। कृपया एक ही सवाल को बार बार ना डालें। आप एक बार जब "submit " बटन दबाएंगे, उसके बाद आपका सवाल यहाँ दिखने में थोड़ा टाइम लगेगा। कृपया धैर्य रखें। अगर हमारे पास आपके सवाल का जवाब है तो हम उसे जल्दी से जल्दी जवाब देने की कोशिश करेंगे। कृपया अपने सवाल ई मेल या सोशल मीडिया पर ना डालें।

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18 comments

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1

We provide highest quality Monocrystalline Solar systems. All our products are made in USA, Japan or Germany. We ensure maximum performance and reliability for our products. Demand better Solar Products!

3

Any query related Installing & Commissioning Grid connected roof top plant for your Domestic, Industries, Schools and colleges. Please feel free to contact us for any information on our e-mail id: [email protected]

4

We are solar power installers in AP,Telangana and karnataka.If any body required solar for your house,school,college and industries Please contact
Bujji
9701009993
[email protected]

5

We are an Solar EPC company and we can provide

solar Rooftop system

-On grid(with net metering)

-Off grid(with battery)

Solar street light 15w to 45w

solar water heater and etc.

contact me at [email protected]

or call +91-9953384191

6

We are an Solar EPC company and we can provide

solar Rooftop system

-On grid(with net metering)

-Off grid(with battery)

Solar street light 15w to 45w

solar water heater and etc.

contact me at [email protected]

or call +91-9953384191

7

We work as consultants for Solar Ground Mounted and Rooftop Projects. We have few projects with us looking for loan and few who are intrested to work on JV. If any one intrested please get in touch with us at [email protected]

8

We are an Solar EPC company and we can provide

solar Rooftop system

-On grid(with net metering)

-Off grid(with battery)

Solar street light 15w to 45w

solar water heater and etc.

contact me at [email protected]

or call +91-9953384191

9

Under ppa, 9.56rs per unit from Bescom for 25 years. Is this a fixed price for 25 years or is it tied to the buying price fluctuation from Bescom ?

10

This price is fixed for the 25-yr duration by BESCOM.

Common arguments are why is it so high when the typical power costs less. We believe BESCOM has been quite visionary in this sense. They had a high tariff to encourage immediate growth of rooftop systems, while knowing that in 3-5 years time their cost of power would not be any less and beyond that they would be saving money with any extra injected power.

11

Let me know if you guys have any schemes for Kolkata. I'm interested in setting up solar with Net Metering.

12

Our financial associations are pan-India. Please write to us at [email protected] with your desired system specs. Thanks.

13

We also need some clarification on the solar cell technology to be used. Should it be monocrystalline or polycrystalline? And why? There is a big difference in the cost of the two technologies and the performance under the weather conditions prevalent in South India. Please advice on this aspect also.

14
Abhishek Jain (Mod)

Mono-crystalline Cells are more efficient than Poly-crystalline Cell, which means you will get more output with less space required. A poly-crystalline cell would be 12-16% efficient, which means for a 1 kWp panel you would need about 80-100 sq ft space. While if you go for a mono-crystalline then that would be about 16-20% efficient, which means a 1 kWp panel would fit in about 70-90 sq ft space. If space is not a constraint then you can go for the cheaper one, as 1 kWp will produce the same amount of electricity.

15

There have been reports of non-payment of PPA dues by BESCOM. How serious is it? If true, then this would be a big dis-incentive for prospective solar-rooftop customers. I too have held back until further clarity on the situation. No point wasting time and effort installing the solar rooftop system, supplying the power to BESCOM and then fighting them to get your dues.

16

Dear Mr. Mathew - we have not heard of any payment issue in Bangalore yet, especially in the residential solar rooftop.
There is some possible change in the large industrial rooftop policy to close an existing loophole in the system. Are you considering it for your house? What size approximately?

Team Oorjan

17
Abhishek Jain (Mod)

Hello Mr Mathew,

We have asked team Oorjan to reply to your question. They have the practical experience of dealing with BESCOM. They should reply to you soon.

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