India’s unique solar energy market

The current power deficit in India stands at around 5%, with Gujraat the only state which can boast of a energy surplus. Domestic consumption in India is much lower than many of our western counterparts. Solar energy has long been touted to be the saviour of our deepening energy crisis.

Despite its many advantages, a major problem with power produced from Silicon solar panels is that it is unreliable, which means it cannot be used for machines with high ratings, i.e machines which have heavy current consumption. The panels used in space stations are Gallium Arsenide based which are much more reliable and efficient but manufacturing them for the domestic purposes is still somewhat unfeasible. Solar based systems have a long way to go before they become mainstream and can be used in industries. So, where exactly can solar energy be used?

The power companies in the United States have solved this problem by installing systems that work in conjunction with the regular power from the grid. Elon Musk’s SolarCity provides rooftop solar panels that serve as an alternative power source and can be used for the lighter appliances. Systems like these are well suited for western countries where consumers have to battle heavy snowfall for several months every year. Also the high per capita income in the west ensures the idea of having two different power sources for a single household is affordable, if it comes with the assurance of long term benefits and an increased environmental conscience.

India’s energy market is unique because it has a sizeable population of people whose energy consumption consists of usage derived from few basic appliances, which are well within the handling capabilities of Silicon based solar panels. The diaspora of rural immigrants in big cities, consisting of construction workers, taxi/auto rickshaw drivers, fast food vendors and many other skilled professionals and small business owners, forms that low income group. They are reluctant to pay the high tariffs for the electricity provided by state electricity boards. High tariffs coupled with lax security leads to rampant power theft in the urban areas. The theft adds up to the already high transmission losses and power companies compensate that loss by further increasing the tariff. So, a vicious circle is formed- people steal power because the tariff is high and the tariff is high because of the theft of power.

This is where solar energy has potential to solve India’s power crisis. To break the cycle, consumers from the aforementioned group need to be assured of low electricity bills over a long period of time, free from government intervention. Solar micro grids, which are getting cheaper every year, can provide continuous power to four or five households. The number of dwellings depends on the size of the panel which further depends on the open area available. The infrastructure, however, is the easy part. The difficult part is marketing this system to the urban poor, who are most likely to view stealing power as the better option. What can make this step easier is a financial model which enables the consumer to pay the cost of installing the system over a long period of time, something equivalent to the life of the system installed. The best thing about Solar micro grids is that they involve no moving parts hence maintenance costs are negligible. The finance model can be something similar to the models available for buying real estate, although an energy plan will have some exclusive challenges.

The biggest challenge will be planning ahead. Any family or a group of individuals which signs up for such a scheme may or may not move up the economic ladder, but if it does, its consumption patterns will change and the Solar power system may cease to be useful. Also, the urban poor mostly live in houses without concrete roofing, which greatly compromises the support required for heavy solar panels. Moreover, the monthly payments need to be adjusted to the prices of panels during that particular time period so that user doesn’t feel cheated. This is a huge hurdle, because unlike coal and gas based power, price of solar power is not fuel- driven. The scheme needs to have technology- driven pricing, and that forms a difficult pitch for any investor.

Most of the country receives ample sunshine and despite the challenges, solar power is our best bet. Companies need to look beyond water heaters and lamps, put more money in research and focus on India’s unique solar energy market.

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