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buy@inverter.co tech@inverter.coFeed in Tariff
In my opinion Feed in Tariff is the right choice to popularize solar harvesting. India tries various failing options which is waste of time. Let us try the Feed in Tariff with sincerity. It is proved a success in several nations that are generating large amount of electricity from solar radiation. Note that 87% global share of solar generation is through the Feed in Tariff policy. I reproduce below one of my earlier postings on Feed in Tariff.
FEED IN TARIFF
The concept Feed in Tariff was evolved in Germany in the 1980s. The Federal Government (Germany) enacted the "Law on Feeding Electricity into the Grid" in 1990. This law was primarily developed by Dr.Hermann Scheer. This law gave priority to renewable energy sources for guaranteed access to the grid and incorporate a comprehensive 'Feed-in-Tariff' system. It became known as "Scheers-Law" around the world. Today it has been introduced, to some extent, by over 75 countries around the globe. Germany applied this LAW for popularizing solar energy harvesting. They amended this LAW in 2000 with comprehensive concepts evolved by using feedbacks from 1990 onwards. They achieved wonderful results in the years that followed. Solar generation took upward growth from almost nil in 1990 to 30000 MW in September 2012. At present Germany adds around 300 - 400 MW solar capacity to the grid EVERY month.
Fixing a Feed in Tariff is the center point as envisaged in the "Scheers-Law". This could find a way out to the 'high cost' arguments against solar energy.
The three parties involved in a grid connected rooftop solar plant (RSP) can be summarized as:
(1) The producer (consumer) who owns the RSP and produce/consume/transmit energy.
(2) The utility who purchases energy generated by producer and feed into grid.
(3) The society that is benefited by the energy generated.
The transactions in RSP may appear as one sided in favor of the producer and is forced upon the other two parties. However, in truth, the other two parties are also benefited from RSP. The concept of 'Feed in Tariff' is based upon the fact that all three are benefited in the process. Apportioning benefits is the main criteria for policy decisions.
Financial factors involved in RSP
The principle of Feed in Tariff is to share the accrued benefit to the society and utility with the producer. This will reduce the burden on the 'solar producer' who invest larger amount compared to the conventional sources.
A main argument against solar harvesting is the initial cost of the solar plant. It is true that initial cost is high. But viewing it in another angle, ie. based on LEVELIZED COST OF ENERGY (LCOE) it is not. LCOE is an economic assessment of the cost of energy-generating system including all the costs involved throughout its LIFETIME: initial investment, operations and maintenance, cost of fuel and cost of capital. As for solar plant the commitment for O&M is negligible, cost of fuel is zero. When the total energy produced during the LIFETIME of the plant is considered the project become financially viable.
Government is to formulate policies that encourage producers to invest in solar sector. Encouragements should never be through CAPITAL SUBSIDY. Feed in Tariff can be decided taking into account various subsidies (Policies) along with factors (7 numbers) mentioned earlier. Once a viable and pragmatic Feed in Tariff is fixed producers will be encouraged to invest in solar harvesting. Progress will be slow in the beginning but will gain momentum in due course.
Note that 80% of solar generation in Germany is from Rooftop plants. India should take advantage of number of residences/commercial buildings in the country. Provide a conducive atmosphere for the growth of solar harvesting. As such the terms and conditions of loan tenure etc is to be moderated to the advantage of small producers-residential rooftop solar power producers.
It is suggested that the policy should encourage intelligent entrepreneurs to come out with various business models in line with the Law of the Land. Once the policy is adopted the government should sit back and watch CAREFULLY the progress or regress of the programme that is visioned in the policy and to get involved, if necessary, for corrections.
There was a report that GOI is preparing a model Feed in Tariff for whole of India which can be used as a guideline for state regulatory commissions. State regulatory commission is empowered to decide Feed in Tariff as per section 86 of Indian Electricity Act 2003. It is hoped that India will soon get into the right track for harvesting solar energy in a big way.
FEED IN TARIFF
The concept Feed in Tariff was evolved in Germany in the 1980s. The Federal Government (Germany) enacted the "Law on Feeding Electricity into the Grid" in 1990. This law was primarily developed by Dr.Hermann Scheer. This law gave priority to renewable energy sources for guaranteed access to the grid and incorporate a comprehensive 'Feed-in-Tariff' system. It became known as "Scheers-Law" around the world. Today it has been introduced, to some extent, by over 75 countries around the globe. Germany applied this LAW for popularizing solar energy harvesting. They amended this LAW in 2000 with comprehensive concepts evolved by using feedbacks from 1990 onwards. They achieved wonderful results in the years that followed. Solar generation took upward growth from almost nil in 1990 to 30000 MW in September 2012. At present Germany adds around 300 - 400 MW solar capacity to the grid EVERY month.
Fixing a Feed in Tariff is the center point as envisaged in the "Scheers-Law". This could find a way out to the 'high cost' arguments against solar energy.
The three parties involved in a grid connected rooftop solar plant (RSP) can be summarized as:
(1) The producer (consumer) who owns the RSP and produce/consume/transmit energy.
(2) The utility who purchases energy generated by producer and feed into grid.
(3) The society that is benefited by the energy generated.
The transactions in RSP may appear as one sided in favor of the producer and is forced upon the other two parties. However, in truth, the other two parties are also benefited from RSP. The concept of 'Feed in Tariff' is based upon the fact that all three are benefited in the process. Apportioning benefits is the main criteria for policy decisions.
Financial factors involved in RSP
- Cost of energy at consumer point includes -bundled per unit cost of energy, per unit cost for construction and maintenance of transmission lines and substations, per unit cost for construction and maintenance of distribution lines and transformers and per unit cost of T&D loss.
- Per unit cost of conventional energy that mitigate price variation of fuel because of geopolitical and commercial reasons for the life of solar pant
- Long term societal value of solar generation from the price mitigation of fossil fuel and nuclear sources (30 years). This is due to the physical realities latent in the availability of various sources- renewables and dwindling resources.
- The taxpayers (Government) are burdened, financially, by the impact of environmental degradation and the connected health hazards.
- Additional revenue (to government) by way of tax from trading & manufacturing and income tax.
- Economic growth of nation and its impact on society from various business ventures and job created that is connected with solar plants.
- Cost on the utility/consumers associated with the infrastructural development for deployment of solar power to the grid.
The principle of Feed in Tariff is to share the accrued benefit to the society and utility with the producer. This will reduce the burden on the 'solar producer' who invest larger amount compared to the conventional sources.
A main argument against solar harvesting is the initial cost of the solar plant. It is true that initial cost is high. But viewing it in another angle, ie. based on LEVELIZED COST OF ENERGY (LCOE) it is not. LCOE is an economic assessment of the cost of energy-generating system including all the costs involved throughout its LIFETIME: initial investment, operations and maintenance, cost of fuel and cost of capital. As for solar plant the commitment for O&M is negligible, cost of fuel is zero. When the total energy produced during the LIFETIME of the plant is considered the project become financially viable.
Government is to formulate policies that encourage producers to invest in solar sector. Encouragements should never be through CAPITAL SUBSIDY. Feed in Tariff can be decided taking into account various subsidies (Policies) along with factors (7 numbers) mentioned earlier. Once a viable and pragmatic Feed in Tariff is fixed producers will be encouraged to invest in solar harvesting. Progress will be slow in the beginning but will gain momentum in due course.
Note that 80% of solar generation in Germany is from Rooftop plants. India should take advantage of number of residences/commercial buildings in the country. Provide a conducive atmosphere for the growth of solar harvesting. As such the terms and conditions of loan tenure etc is to be moderated to the advantage of small producers-residential rooftop solar power producers.
It is suggested that the policy should encourage intelligent entrepreneurs to come out with various business models in line with the Law of the Land. Once the policy is adopted the government should sit back and watch CAREFULLY the progress or regress of the programme that is visioned in the policy and to get involved, if necessary, for corrections.
There was a report that GOI is preparing a model Feed in Tariff for whole of India which can be used as a guideline for state regulatory commissions. State regulatory commission is empowered to decide Feed in Tariff as per section 86 of Indian Electricity Act 2003. It is hoped that India will soon get into the right track for harvesting solar energy in a big way.
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