Could Solar Energy power Indian homes for free?

Imagine running all your electricity-hungry home appliances and devices at home as much as you want and paying zero or near-zero electricity bill. This is already an accepted way of life for many people in Germany, a handful of American states, and a few other countries around the world where electricity tariffs have not just fallen to record levels, but are in fact negative in a few cases. In other words, homeowners have gotten paid for consuming electricity.

Abundance of solar and wind-generated power is what has led to the phenomenon of negative tariffs. Unlike conventional thermal, hydro or nuclear plants that can be shut down partially or fully when there is no demand, wind and solar plants cannot be turned off. Since the electricity generated must be consumed to avoid issues with the grid, discoms are forced to sell it at rock-bottom prices to residential consumers. While there are some legitimate concerns about long term sustainability of dirt-cheap electricity, the inevitability of it in several countries around the world is far from moot.

Will we ever see a day of free or near free electricity in India? Probably yes, as our policymakers have certainly taken steps in this direction over the recent years. India has set itself an ambitious goal of installing 175 Gigawatts (GW) of renewable power capacity by 2022. Of this, 160 GW is targeted for solar and wind power. To put these figures in perspective, our country’s aggregated peak power demand was 177GW in 2018-19 (till February). (Editor’s note: the typical generation capacity is 15-20 percent as of now.)

For the impatient ones, getting a private solar rooftop power plant installed on the home terrace is another way of slashing electricity bills without compromising on electricity consumption. In fact, households already make up around 9% of India’s installed solar rooftop capacity, pegged at 521 MW as of September 2018, as per data from renewable consultancy Bridge to India.

Combine this with the fact that India’s geographic location and climate – the country gets an average of 300 sunny days a year – are highly conducive to solar power generation, and it is easy to see value in getting a solar rooftop for home terrace, provided the homeowner has terrace rights and the terrace isn’t shaded from sun by nearby high-rises. According to the World Bank, “India [have] among the best conditions in the world to capture and use solar energy”.

Our government policies also encourage solar rooftops. Not only the government subsidises solar rooftop installation cost by 30%, many state electricity boards today offer net metering, which essentially means that homeowners with private solar rooftops can supply surplus power back to the grid, earning credits in return. These credits can be offset whenever power is used from the grid (in months when air conditioners run), and at the end of the year the family gets to save as much 100% of electricity bill.

There are other considerations in favour; solar panel prices have gone down dramatically in the recent years and a KW capacity can be installed for under INR 50,000. In essence, homes running one or more air conditioners can save enough on their annual electricity spends so as to recover their installation cost in as little as four years. Once the investment has been recovered, a solar rooftop plant is still usable for another 20-25 years; leading to substantial long term savings for those who take the plunge.

Partially Cloudy

Despite the obvious benefits of a home solar rooftop, very few households, even those running heavy electricity bills on account of use of multiple air conditioners, have actually installed one. There are some obvious challenges, the primary among them is lack of general awareness about the cost and benefits of installing a solar rooftop.

On its part, the central government has shown great commitment to kick starting the home solar rooftop revolution in India and we believe residential solar rooftop systems will be a crucial component of achieving our country’s renewable energy target. Towards this end, we expect a further streamlining of policies and procedures in the coming years. The good news is that for the people of India, a future with abundant and cheap electricity is closer to reality than ever, whether through private home rooftop systems or grid power generated by solar and wind plants.