Indian choice for energy is solar plant (Part 2)

(Back to Part 1) Financial factors involved in RSP

1. 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.
2. Per unit cost of conventional energy that mitigate price variation of fuel because of geopolitical and commercial reasons for the life of solar pant
3. 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- renewable and dwindling resources.
4. The taxpayers (Government) are burdened, financially, by the impact of environmental degradation and the connected health hazards.
5. Additional revenue (to government) by way of tax from trading & manufacturing and income tax.
6. Economic growth of nation and its impact on society from various business ventures and job created that is connected with solar plants.
7. 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. FIT can be decided taking into account various subsidies (Policies) along with factors (7 numbers) mentioned earlier. Once a viable and pragmatic FIT 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 versioned in the policy and to get involved, if necessary, for corrections.

There was a report that GOI is preparing a model FIT for whole of India which can be used as a guideline for state regulatory commissions. State regulatory commission is empowered to decide FIT 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.