The heat of the sun this summer may leave you high and dry. But it can soothe your purse strings if you have a solar roof top project to harness the sun’s energy.

India receives a total of 5,000 trillion KW of solar energy per year. Solar rooftop power installation is driven mainly by residential and commercial users.

Residential supplies The viability of a solar rooftop varies across States based on two factors. First, the cost of installation per kilo watt of residential unit varies from ₹80,000 to ₹90,000.

A Central subsidy of ₹24,000 is given for the first kilo watt of installation for residences. Some States such as Tamil Nadu provide an additional ₹20,000 subsidy on the first kilo watt to residences. Second, the State electricity boards subsidise electricity for residential users with the effective charge per unit of electricity increasing as the units consumed go up.

For example, in Tamil Nadu, at the current rates, a residential user consuming 1,000 units bi-monthly, pays close to ₹5,500.

Let us assume that you install a 2 KW solar plant that has the capacity to generate a total of 540 units in two months (135 units per kilo watt per month).

The balance 460 units consumed from the conventional grid will cost you close to ₹1,200 (on a bi-monthly basis). With savings of about ₹4,300, you can recover your initial investment of ₹1,20,000 in five years.

With only the Central subsidy and giving allowance for possible power wastages from the solar unit, the payback period can extend to six or seven years. The other advantage is the possibility of transferring the extra generated electricity, if not consumed, to the grid. Sikkander Amin, Director, Vigor Solar Energy says “Life of a solar rooftop project is 25 years. After the first seven years, once the residential unit reaches the breakeven stage, electricity is free for the next 18 years. If a residential unit’s bi-monthly bill is ₹5,000, it can use a 2 KW system.”

For a commercial plant, however, State electricity boards charge ₹9 per unit for consuming 1,000 units bi-monthly.

Given the huge savings, the payback period in this case is even lower than for a residential unit.

New business model

Big systems, such as a 150-250 KW plant installed on the rooftop of a commercial complex or a residential common area can cut the bills drastically. However, it involves a huge upfront cost of ₹65,000-₹70,000 per kilo watt.

SunAlpha energy, a solar rooftop company, offers a new business model where it coughs up the entire amount for the initial investment, on the condition that the user will buy the entire power generated.

In turn, the user is charged a lower tariff rate — say, ₹1 lower per unit than under the conventional system for a certain period of time. Puneet Goyal, Director – Operations, SunAlpha Energy says, “Such systems become feasible when the required plant size is 150 KW and above. This form of electricity procurement is used in commercial complexes, big residential unit’s common area and club houses.”

Short comings A rooftop project requires 100 sq ft per kilo watt space with zero maintenance cost.

The solar rooftop panel and corresponding network installation is usually done for a single residential unit.

This is because the additional cost incurred for a centralised battery and the possibility of conflict of interest due to sharing of capital cost, pose challenges for a joint ownership.

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