Solar City Initiative - making urban cities greener
Present day solar photovoltaic cells are available in a variety of colors that can match the building color profile, which has prompted architects and city planners to integrate them into existing and upcoming buildings. Commonly termed as Building Integrated Photovoltaics, their extensive use can help in developing enterprises, creating employment, offsetting construction costs, generating clean power, and re-defining building architecture with colorful glass walls that provide energy
Introduction
Compared to other countries, emission levels in India are not so alarming; however, the call for use of renewable energy technologies is showing an increasing trend. One technology that is virtually emission-free and should find favor for every citizen is solar energy, particularly solar photovoltaics (SPV). It is best suited as a decentralized source that can be used by every individual in India, since the conditions are tropical where nearly 300 sunlight days are available in most regions.
City administrators can announce schemes for emissions reductions by encouraging the use of decentralized SPV integrated into buildings, since solar power is eco-friendly and free from greenhouse gases. One major advantage with SPV technology being a decentralized source is that it can help reduce peak power demand and the burden on the utility supplying electricity, thus preventing setting up of new power plants. Besides, when integrated as a part of the building in the form of a tile, it offsets some of the construction material costs. Besides, the variety of colored solar cells can be used to match the profile of the building to improve its aesthetic appeal.
It can be proved that by the sixth 10-year plan, as costs of SPV cells decrease with time, its cost of generation will virtually match the cost of grid-supplied power. It is from this period onward that SPV will start finding favor and will not require additional government support (apart from the accelerated depreciation). While showing the computation, it is assumed that the rate of interest will be 2 percent and the Debt–Equity ratio 90:10.
Solacitin
An initiative called “Solar City Initiative” (SOLACITIN) could be launched in urban cities of India categorized in order of high population and high peak demand. SOLACITIN will focus only on Building Integrated Photovoltaics (BIPV) in the form of tiles that can be integrated into the buildings. The annual target would be 50,000 systems, with each system of 1 kWp capacity or in multiples of 1 kWp, and without the use of battery. It would be on a first come first served basis. It will be undertaken through a private initiative by entertaining the following categories of buildings on priority:
- Industries
- Commercial establishments owned by a single entity
- FIve-star hotels
- Private hospitals
These categories have been chosen considering the premium cost per kWh they pay for grid power and because they can also avail Income Tax benefits by way of 80 percent accelerated depreciation. Residential dwellings availing subsidized grid power and who have peak demand post-evening may not find favour, hence are not considered. Besides, they cannot avail of Income Tax benefits by accelerated depreciation. Depending on the success and availability of solar cells the target for every subsequent year can be revised.
Sample Case Study
As a sample case, 50,000 BIPV systems, each of 1 kW, will be considered in a year that will receive government support in order that BIPV systems are popularized. The key driving factors will be concession on interest on loan at the rate of 2 percent per annum on reducing balance and the Debt–Equity ratio of 90:10. It is also assumed that the accelerated depreciation benefit at the rate of 80 percent will be offered until BIPV systems costs are economically feasible to sustain on their own to compete with grid power. Only those investors who can avail 80 percent accelerated depreciation benefits will be entertained. See Table 1 on page 28 for a summary.
The lending institute will seek full security against the debt. The debt will reduce as loan is repaid. As a condition, no investor will back out of the scheme anytime in between until debt is recovered, else the security equivalent to the debt will be forfeited. This is to ensure that the BIPV system performs for the desired period to gain public confidence.
Another factor is cost escalation from grid power at the rate of 5 percent each year. Simultaneously, the cost per kilo-watt hour from the BIPV system is discounted at the rate of 5 percent from the previous 10-year plan every year assuming the cost of SPV cells will wane with time. Bringing in more competition will reduce the investment cost and increase the customer base. This will make SPV projects self-sustaining. The salient features of the investment conditions in BIPV are summarized in Table 1.
Analysis
Looking at Table 2, during the first 10-year operation starting from the financial year 2006-07, the cost per kilo-watt hour from BIPV project is high. In order to make it financially attractive, the additional cost compared to the grid power cost needs to be offset through government subsidy. However, during this 10-year plan as grid power cost will escalate (assumed @ 5% pa), it is virtually at par with BIPV cost at the end of the eighth year. From this period onwards, the project is self sustaining.
Table 3 shows that during the sixth 10-year of operation (financial year 2011-12), the cost per kilo-watt hour from BIPV system in the first year itself is virtually at par with the estimated grid power, hence will not require support form the government to offset the cost difference. Thus, the scheme is self-sustaining. It is from this stage onward that the government may formulate suitable policy measures to attract residential dwellings also to consider BIPV systems by offsetting against the grid power cost per kilo-watt hour assuming that the residential sector continues to receive concessional tariff from the grid.
See Tables 4 and 5 for a comparison of the cost per kilo watt hour in any given year for the BIPV system (with interest on capital) and power drawn from the grid, respectively. The highlighted figures indicate the tariff from either sources nearly match each other. During the sixth 10-year Plan, the cost of power generated from a BIPV system is nearly the same as that of grid power tariff in that particular year. See Graph 1 for a profile during the first 10-year plan, which is virtually reflected in the sixth 10-year plan. Thus it becomes a positive and favorable scenario for use of SPV power by integrating them into buildings subject to the conditions given in Table 1.
Table 6 is a summary of the tariff of either sources in the first year of its 10-year Plan and the desired share of revenue form the government.
Entrepreneurship and Employment Generation
This initiative, if implemented successfully, can result into develop-ment of industries manufacturing solar cells that will help meet the growing demand, thus creating adequate employment generation. It will also re-define building architecture with colorful glass walls that provide energy.
India as a country is spread over 3,287,263 sq km and receives on an average 5.5 GWh/km2/day of solar insolation for 300 days a year. Assuming efficiency of solar cells to be at the rate of 15 percent, and 1 percent area as occupied by buildings, then the country has the potential to generate 8,135,976 GWh per day, which is sufficient to meet day-time electricity requirements of all buildings. Considering that a 1 kW BIPV system annually generates 1,650 kWh or 0.00165 GWh, the potential of a 1 kW BIPV system that can be implemented will be 4,930 million BIPV systems (8,135,976/0.00165).
For every 1,000 systems, if two maintenance personnel are deployed for installation and upkeep, the potential for employment generation in the country becomes 5 million. Hence, for 500,000 BIPV systems installed in a span of 10 years, 500 maintenance personnel can be employed for installation and upkeep of BIPV.
Assuming each manufacturing facility is of 100,000 kW (100 MW), then to meet the 10-year target, one manufacturing facility will be required every alternate year.
Conclusion
The ultimate goal of this initiative is to ensure that within 10 years micro-sized SPV systems that are currently emerging technologies become commercially viable after a certain period and reduce the government’s dependence on fossil fuel-based energy which is largely imported in a developing country like India and has limited resources. Considering the growing demand for power, BIPV has the potential to fulfill this gap to a greater extent. India being a tropical country has access to sunlight for nearly 300 days a year in most of the regions, and thus can benefit from this perennial source. This can also lead to employment generation in manu-facturing, marketing and maintenance of systems. The scheme has all the benefits for a bright future and needs initiative from the government to implement in the right earnest.
