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A sun-rise industry turning sun-set
There is total lack of enthusiasm for roof top solar power. Unclear policy, poor implementation and pervasive corruption have killed a much needed facility. Yet the Centre talks of 1,75,000 MW capacity for non-conventional energy pushing out coal!

Remember the acute power crisis suffered by Tamil Nadu in 2012? There were humongous shortages in energy availability and erratic supplies. Outside the Chennai metro, there were power cuts for 16 hours and more a day. After the usual blame game, of the AIADMK accusing the DMK  for the mess, there were serious efforts at getting over the crisis. 

That was the time the government stepped up a big campaign for solar power. IIT-Madras claimed simple solar power installations  could comfortably meet the entire demand from agriculture and domestic consumers. The Centre and the states came out with promises of attractive incentives. A solar power policy was announced by Tamil Nadu in a hurry with little clarity.


The IE experience, of poor returns...

Impressed by the new technology and attracted by the promise of handsome  support, IE invested in one of the first sizeable rooftop solar facilities, of 25 KW. Saint-Gobain, which ha wealth of experience in solar power, through its subsidiary Avances, Germany, was keen to enter the solar power business.  The field witnessed a rush of enterprises, big and small - including the Tatas, Mahindras, Edison ....

We did set up the rooftop facility at the Economist House with the liberal support of Saint Gobain at a cost of around Rs 36 lakh. We were then in for several shocks: chief among these was a denial of subsidy/support for imported SPV modules. So, the original expectation of a third of the cost subsidised was belied. The only attraction was the high rate of depreciation. 

In the absence of making available a net metering facility, half the generation was lost. In fact, our consultant said that power fed into the grid was added in computing our consumption bill! There was little clarity on the policy handled by multiple agencies, all unable to provide the right information. It took three years to get the net metering facility. But still, there is no precise information on the credit for the generation. ROI is extremely low.


Lack of clarity in policy, pervasive corruption...

Because of the lack of clarity in policy and pervasive corruption, most of the large corporations lost interest and dropped their plans for the solar power business. The most notable of the crashes was that of the American company, Sun Edison, which filed for bankruptcy.


Topless roof tops...

Soon started the campaign for domestic rooftop solar facilities. There was the promise of  Rs 5000 rebate for the first KW and a liberal provision for giving credit for the power generated.

The poor state of finances of TANGEDCO came in the way of the company sticking to the original attractive terms. The state government with its equally deplorable state of finances, combined with the lack of a dynamic leadership, was just not bothered to promote the much needed and much-touted scheme. 

Look at the present status: no sooner you apply for a rooftop solar facility online, than some 20-30 operators flood you with offers. These get the information from the Centre’s MNRE website. These admit the near impossibility of getting the state subsidy: it is corruption-ridden. If you still insist, they load the subsidy element plus a liberal margin and quote a higher price and warn you of a delay of a year and more of getting the subsidy!

Assuming an average generation of 3.5 units per KW, the production per day will work to 10.5 units or 315 units per month or 3780 units per year.

Now comes a new problem: earlier TANGEDCO offered to provide credit for this generation in total consumption; for average households which go for such an expensive facility, the average cost is around Rs 5 per unit. Now the policy has changed with TANGEDCO suggesting a flat rate of Rs 2.80 per unit! On this, the net income is Rs 10584. Thus the return on the investment is less than 3 per cent on costs of around Rs 3.5 lakh on a 3 kw facility (including structurals to a height of 4m to ensure optimal sunrays)! Are you then surprised over the total lack of enthusiasm on the part of the consumer to go for this facility?

A primary reason for the government’s apathy is the improvement in power availability. Add to this the lack of interest over medium and long-term planning by the political leadership which is bogged down by survival battles.  – SV

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IE, the business magazine from south was launched in 1968 and pioneered business journalism in south. Through the 45 years IE has been focusing on well-presented and well-researched articles. When giants in the industry stumbled to keep pace with the digital revolution, IE stayed affixed embracing technology.
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