Growing Opportunities for Hybrid AC-DC Infrastructure in India: Report

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A new report by GOGLA attempts to deep dive into the relevance of hybrid AC-DC (HAD) energy infrastructure in India

A new report by GOGLA attempts to deep dive into the relevance of hybrid AC-DC (HAD) energy infrastructure in India with the objective of providing insights into how energy-efficient appliances can be integrated with the electricity grid. It believes that while HAD is an emerging consumer need and market for the DRE sector, it also ties with the Government of India initiatives and will hopefully lead to innovations and improve market adoption.

India stands strong in achieving universal access to electricity with almost 100 percent electrification coverage by 2019. The national grid has played a very important role in improving this access, but its reliability continues to pose a challenge, and more so in semi-urban, rural and remote areas. Distributed Renewable Energy (DRE) in the form of solar roof tops (SRT) and solar home systems (SHS) tied with efficient appliances help improve reliability of service and are seeing increased adoption. By some estimates, there are approximately 4 million households (HHs) (1.4 percent of the total 277 million HHs in India) with some form of SRTs or SHSs in India.

Many of the previously used SHSs were standalone systems powering AC and/or DC Appliances with energy storage. Today, there is a new class of DRE solutions commonly termed Hybrid Solar Systems, which integrates solar with AC grid power (uni or bi-directional) and can power AC and/or DC appliances. Such new Hybrid AC-DC (HAD) power solutions can help users to take advantage of solar power – improving supply hours and reducing their Power Distribution Company (Discom) energy bills. India saw estimated annual sales of some 0.8 million units of solar hybrid inverters or uninterruptible power supply (UPS) systems in 2019 (compared to some 8 million unit sales of conventional inverters) and there is an expected increasing trend. 

It adds that more and more power systems and appliances OEMs and System Integrators are joining this fast-growing HAD market in India. There is a new class of efficient appliances (including lights, bulbs, fans, TVs, refrigerators, washing machines, pumps, etc.) that use fundamental DC-run LED or BLDC motors, and can be run on AC supply and/or DC supply. Some further innovations in appliances include embedding energy storage inside the appliance to avoid the need for costly centralised power back-up solutions. These innovations on the appliance side will further push for the increased need of enabling HAD infrastructure for the synergistic co-existence of AC and DC.

In the paper, the HAD infrastructure has been analysed in detail from two perspectives: a) Supply-side: power back-up solution side through combining grid, solar and battery storage, and b) Consumption-side: appliance side by enabling appliances to work with both AC and DC supplies. 

The following customer segments are expected to drive the demand for HAD solutions from the supply perspective:

• HHs with no power back-up solutions Hybrid AC-DC Infrastructure in India
• Potential grid-connected customers
• Existing HHs using conventional UPS systems
• Existing AC Mini/Microgrids
• Existing Standalone SHS customers

It then goes on to add that hybrid grid-tied inverters are new in the Indian market but are anticipated to see growth with increasing SRT installations. Initially, this demand can be expected to come from cities and government institutions. However, the high upfront costs and lack of consumer awareness of new technologies may be a limiting factor in achieving high volumes.

Furthermore, from the appliance perspective, two new categories of energy-efficient (EE) HAD appliances are emerging in the market, one with dual inputs and another with an integrated battery. Presently, hybrid appliances are priced two to four times higher than conventional AC appliances. However, as the technology gains more popular among both original equipment manufacturers (OEMs) and consumers, they may become more affordable. Hybrid light bulbs and fans are expected to be the first set of appliances to become cost-effective. 

The market for hybrid appliances with a single input (mainly AC) and integrated battery is in its nascent stages. Due to grid electrification, there exists an untapped potential for such appliances, especially in areas where the power supply from the grid is unreliable. As the price of battery storage falls further and new technologies emerge, hybrid appliances can become an alternative to conventional UPS systems, especially among lower-income groups or below the poverty line (BPL) consumers. However, the uptake of hybrid appliances with an integrated battery may be limited among HHs that are already using conventional or solar UPS solutions.

To further strengthen the HAD infrastructure in India, the report has listed the following key recommendations:

The report concludes by stating that the market is evidently heading towards hybridisation, i.e. integration of AC-DC power supply and appliances that support these systems. However, challenges like high upfront equipment cost, high sales effort, low customer awareness, and lack of standardisation are an acknowledged reality. Yet, these factors should not deter off-grid players from diversifying and offering HAD solutions to customers. The key industry stakeholders like OEMs, Government and Industry Associations will play a vital role in mitigating these challenges and enabling the growth of HAD infrastructure in India.