- The commercial establishments (including educational institutions, warehouses, supermarkets/malls, banquet halls etc) have large rooftop space and pay some of the highest tariﬀs (up to Rs 12 per unit in some cases) for power from the discoms. Thus, rooftop solar PV installations which can supply power at Rs 5-7 per unit give them a huge relief in terms of cost of power and paybacks as attractive as 3 years in some of the states. For global companies like IBM, it not only makes good business sense to adopt cheaper solar power, but it also falls in line with their global corporate policy of “going green”
- Moreover, developers in the rooftop solar PV segment have been very active. There is a good amount of competition and a large area of rooftop space still available in the country giving this business a lot of potential to be tapped.”
Asked to comment on how data centres too could adopt solar, an India Power spokesperson said, “It is a good initiative taken by schools, educational institutions, online marketplace Snapdeal warehouses and ashrams to install solar for their power requirements. This will not only create awareness but also promote solar among local people and children. Data centres have large rooftops which can be used for installation of solar and the power produced by them can be utilised for their own use. The Government of India has set up a target of achieving 40 MW solar rooftops by the end of 2022. If data centres are ready to install, they not only reduce their power consumption but also reduce GHG gas emissions. The data centres can emulate IBM’s example and adopt solar in order to reduce greenhouse gas emissions by using solar power. Due to constrained supply of coal and the poor fnancial condition of Indian utilities, the price of electricity has been increasing over the last few years. This installation of large rooftops will act as a boon for data centres in order to reduce their consumption of units and billing.
The cost of solar power generation has been falling considerably. Commercial and industrial consumers, as such, face the highest power tariﬀs among all consumer groups. It becomes necessary for Indian IT companies and data centres to take several measures in order to reduce their carbon footprint and switch, at least partially, to clean energy sources.”
In the last few years many multi-national and domestic solar power plant developers have won projects through competitive bidding and are oﬀering electricity tariﬀs much lower than Rs 5 a unit. It is felt that these low tariﬀs have not yet adversely impacted the engineering, procurement and construction (EPC) frms or solar panel makers. Asked if the solar industry will feel the heat of low tariﬀs in the years to come, Aditya Ravindran said ,
- Developers have been the community facing a large part of the troubles from the low tariﬀs as they are not able to successfully ensure the fnancial closure of projects with low tariﬀs. Even if they manage to establish fnancial closure and achieve commissioning, their fnancial problems, if any, would come to the fore only when they commence commercial operation. Meanwhile, there is solar capacity addition still going on successfully at relatively higher tariﬀs, and this is keeping the EPC companies busy for now. Larger EPC frms are actively pursuing business opportunities in foreign territories including South East Asia and Africa.”
About whether the solar industry will feel the heat of low tariﬀs in the years to come, an India Power spokesperson, said, “The solar industry is not going to feel the heat of low tariﬀs in the years to come. The main reasons are low cost technology and the cost of debt is coming down. India has an ambitious plan to add 100 gigawatts (GW) of solar power by 2022. Most of the big international players such as Fortum, SoftBank, First Solar etc, are looking for an opportunity to invest in solar.”