This chapter presents techno-economic analysis and prevailing policy mechanisms of some applications where solar energy makes most social and environmental sense. Small scale gridconnected and off-grid applications are discussed. Furthermore, in all of these, solar is either economically viable today or will be in the near future. Where relevant, the levelised cost of energy (LCOE) and internal rate of return (IRR) for the developer or investor are calculated to assist in analysis. The discussions here are meant to give the reader a broad picture of the applications and challenges. The applications considered in this chapter are: Solar photovoltaic (PV) options for rural electrification: Simple effective solutions, including solar lanterns and SHLS are discussed, along with solar-based microgrids. Prevailing financial, policy and institutional mechanisms and barriers to wide-scale adoption are also taken up. The technoeconomics of a solar-based microgrid is compared with grid extension. The current capital subsidy is compared with a generation-based tariff structure. Based on the analysis, a generation-based tariff is recommended for rural microgrids solely consisting of solar energy or hybridised with other renewable energy sources in order to ensure sustainable operation. Solar-PV-based irrigation pump sets: These pumps are found to be competitive at today’s cost relative to diesel-based pumps based on cost per unit of electricity or work done. Economic analysis is provided for pumps of two sizes – 1 HP and 2 HP – needed to draw water from up to 230 ft (70.1 m) and up to 530 ft (161.5 m) respectively. Rooftop PV systems for diesel use abatement: In the case of solar PV systems for diesel consumption abatement, techno-economics is accompanied with a sensitivity analysis that incorporates varying diesel and PV system prices. It is demonstrated that the solar PV system could prove to be viable if diesel prices were to increase or PV systems prices were to come down. The total potential commercial rooftop available and a conservative market size for solar PV for reduction in diesel use is estimated. In addition to the economics, grid-connected rooftop PV systems could face technical challenges given India’s transmission and distribution (T&D) woes. Policy recommendations are made at the end of the section.
Solar PV for Telecom Towers India has more than 250,000 cell phone towers, each equipped with a diesel generator of 3 to 5 kW capacity depending on the number of operators housed on the tower. The towers are energy intensive since they operate non-stop. Given that a substantial number of these towers are in rural areas and any new additions are likely to be there as well, diesel consumption will be inevitable given the grid challenges. Roughly about 2 billion litres of diesel is consumed annually, amounting to around 4.5 million tons of CO2 emissions. The Ministry of New and Renewable Energy (MNRE) is incentivising the replacement of diesel for telecom towers with solar PV. This report, however, does not evaluate the economics of solar PV for use in telecom towers.
Solar Photovoltaic Applications
In the case of smaller PV plants, particularly off-grid plants where duration of generation and demand may not match, the energy generated can be stored in batteries. However, batteries increase the overall cost of the system, need replacement every few years, and lower the overall efficiency. Hence, all the analyses given in this section for individual applications have taken into account the cost and efficiency of batteries. In addition, assumptions have been made on the capital cost of the system, hours of annual insolation and discount rate.
1. Solar PV Options for Rural Electrification in India
Almost 16% of India’s 600,000 villages are un-electrified.1,a A village is deemed to be electrified if the distribution infrastructure has been set up with minimum...