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Gurgaon residents to produce, sell solar power

Civil Society News, Gurgaon

Bestech Park View Residency is basking in solar power glory. It is all set to be the first gated community in Gurgaon to go partially off-grid with 270 KW coming from panels of photovoltaic cells atop its nine  buildings. The solar power won’t meet all the needs of residents, but it will be cheaper per unit than conventional power. They will also no longer have to run costly and polluting diesel generators to deal with grid vagaries like breakdowns and poor supply.  

The residents of Bestech Park View Residency haven’t had to sink any money into making this transition. They have an agreement with Fourth Partner Energy, a renewable energy service company or RESCO, which has made the investments. Under the agreement, for the next 25 years the residents will get solar power at a rate of `6.95 per unit with an increase of 3.5 per cent a year, which is less than the `7.8 charged by the Dakshin Haryana Bijli Vitran Nigam (DHBVN). In winter, about 25 per cent of the demand will be met through solar power and in summer about 15 per cent.

The condominium will be consuming all the solar power it will produce. However, technically, surplus solar power can be sold by feeding it into the grid. So, Bestech Park View Residency will now have a ‘two-way net meter’ which can measure solar energy that is put into the grid and conventional energy used by its residents. At present, there are  no plans to sell the solar power but, going forward, this is an option. A second meter will measure the solar power consumed.

“We want to save energy, be green and implement government policy,” explains S.C. Kumar, president of the Residents’ Welfare Association (RWA) and a former government official who retired from the Cabinet Secretariat some years ago. “We held a general meeting and there was absolutely no objection from any resident.”

In Haryana, it is mandatory for every building over 500 square yards to have solar power. In the past year, the administration has been working to smoothen processes, create awareness and make it easier for citizens to opt for solar power.

The new policy has got people thinking. The cost of solar energy has been declining; on the other hand, conventional power keeps getting costlier. There are also power cuts when supply falls short. Gurgaon could be India’s foremost solar city since it receives sunshine for nearly 300 days in the year.

The problem so far has been the initial capital cost of installing solar panels and putting a functioning, dependable system in place. It involves spending a few crores of rupees depending on the size of the plant. But with a RESCO putting in the capital and technical expertise, and with a business model in place, suddenly solar energy makes good economic sense.

The panels have also become cheaper and entrepreneurs have been allowed to come in and build viable businesses for captive users. Added to all this is a rebate of 25 paise per unit of conventional power provided by the government as an incentive for generating solar power.

“In peak summer we consume around 2.5 MW and in winter this drops to 1.2 MW,” says Rajiv Verma, treasurer of the RWA who works at IBM. “With solar we expect to meet 25 per cent of our demand in winter and 15 per cent in summer. On an average, the colony’s electricity bill works out to `25 lakh per month. With solar we hope to reduce this by `48,000 during the winter months and `1 lakh during the summer months.”

Verma explains that the cost of solar power is also offset by the savings from not using diesel generators. “In summer, we have four to five hours of power cuts. The cost of generating a unit of power from diesel works out to `14.5 per unit.”

Imran Usmani, manager of Fourth Partner Energy, says the cost of running a solar power plant makes it possible to offer an unchanged rate of `6.95 per unit for 25 years to the colony. “We have done commercial buildings.  This is our first residential project,” he says.

Things have been looking up for Bestech Park View Residency ever since its ambitious RWA took over from the builder 18 months ago. It is located in the midst of crumbling civic services. The road that runs by its gates is full of potholes. But the condominium’s compound is clean and green. Cycle tracks and pedestrian pathways are being made, a sewage treatment plant (STP) provides usable water, 600 trees have been planted and new roots and shoots sprout from a freshly laid botanical garden. The entire colony is under CCTV surveillance.

“The STP processes 180,000 litres of waste water every day. We reuse it for horticulture and for flushing toilets. Our water bill has been reduced from `1 lakh to `50,000 per month. We will be applying for green building certification and go in for carbon trading,” says Verma.

 

Nirvana gets ready

Bestech Park View Residency has been quick to cash in on the solar opportunity. But Nirvana Country has also been hard at work. It is a housing colony on 300 acres with 3,500-4,000 residents, in mostly low-rise houses. Negotiations are underway to wrest a good deal from a RESCO.

Sanu Kapila, president of the RWA there, says tenders have been floated and they hope to get their ‘grid interactive rooftop solar system with net metering’ started very soon.  

“We will not invest anything,” explains Kapila. “The RESCO will invest, generate the power and sell it to us at a fixed rate for 15 years. This rate will be lower than the grid rate.”

Nirvana is simply offering the RESCO the space needed to set up the solar plant. The RESCO will set it up, look after operations and maintenance, and sell the solar power generated at a rate lower than the grid rate for 15 years after which the solar plant will become the property of the colony.

Here, too, it wasn’t difficult to convince residents.  The RWA had encouraged residents to get involved and live as a community. “We are also the first to set up a retail store where farmers can sell vegetables directly so that they earn more. We resolved the problem of stray dogs by getting an NGO to train them as guards. So when we floated this idea of solar power residents voted unanimously for it,” says Kapila.

The Nirvana RWA is implementing solar power installation in phases. In the first phase 17-18 arrays of solar panels will be installed in common areas. They will generate 200 KW initially which will over time rise to around 700 KW.

“Lights, fans, water pumps, computers, everything in our common facilities that consume power will be run on solar energy,” explains Kapila. “The total power we need for our common facilities is about 1,500 KW. We hope to meet 30 per cent of our power needs from solar energy. This is also the limit set by regulators because of grid stabilisation issues.” Seven or eight two-way net meters will replace conventional meters.

The solar power produced by Nirvana Country will be fed directly into the grid via the net meters during the day. Since the common facilities have to be run after dark, the housing colony will draw back the equivalent power from  the grid.

“We won’t be storing the power in batteries because this makes the model more expensive. Batteries are also not environmentally friendly,” says Kapila. 

In the second phase, around 100 households will install solar panels on their rooftops.  “They are offering their rooftops voluntarily because their power bills will come down and, in the long term, savings on power will be very significant,” says Kapila. These homes will have individual net meters.

For the next 15 years Nirvana will pay a fixed rate of `6.40 to the RESCO while DHBVN, which charges `8 plus per unit, is expected to increase its rate by at least 8-10 per cent every year. So by the end of 15 years, Kapila says, the residents will be paying roughly 40-50 per cent of the electricity bill that they would have paid to DHBVN had they not had solar power.

Once the RESCO hands over the infrastructure, Nirvana will not have to pay anybody a single paisa for the solar power. The life of a solar plant is around 25 years.

So if Nirvana generates 30 per cent of its total power needs from solar, it will save close to 60 per cent of its total electricity bill because of the fixed rate for solar for 15 years and then the free power for 10 years. Meanwhile, the price of conventional power from the grid will keep rising.

 

18 months in the making

“Haryana is the first state in the country to make it mandatory for all large buildings of more than 500 sq yards to install solar rooftop power plants,” emphasises Vinay Pratap Singh, Additional Deputy Commissioner (ADC) of Gurgaon.

A graduate from the Birla Institute of Technology and Science (BITS), Pilani, Singh and his team have worked persistently over the last 18 months to make sure installing solar systems becomes economically viable and easy to implement. The government can then enforce compliance with its mandatory order. The ADCs of each district have been made the implementation officers of the solar energy programme.

“The total solar energy capacity installed in Gurgaon over the last five-six years is about 5 MW. I expect that figure to jump to 50 MW by June-July this year,” says Singh, upbeat about Gurgaon’s sunny future.

The government, on its part, offers a 30 per cent subsidy on installation costs on a first-come-first-served basis. That means, if funds are available. The Haryana Electricity Regulatory Commission (HERC) gives a 25 paise rebate on every unit of electricity generated through rooftop solar power plants.

The minimum solar power capacity to be installed is 1 KW or around 3-5 per cent of a building’s connected load. A 1 KW plant can generate up to 4.5 units of electricity a day, enough to power three fans, seven tubelights and a cooler for four to five hours. It costs about `1.2 lakh per KW.

“We have closed the loop. Now all the elements and the necessary ecosystem are in place for rapid implementation of decentralised grid interactive solar power generation,” says Singh.

The administration has had to nudge several agencies and stakeholders into framing regulations and processes. Many issues had to be resolved.

Citizens needed to be aware of the policy. Agencies that sanctioned building plans such as the Haryana Urban Development Authority (HUDA) still had to frame regulation and ensure that all new buildings, industries and social institutions included solar power in their plans. Banks had to be nudged into providing housing loans that included the cost of rooftop solar power plants.

Agencies like the Haryana Electricity Regulatory Commission (HERC) too had to frame regulations to enable implementation. The responsibility of providing subsidies and incentives was given to the Haryana Renewable Energy Development Agency (HAREDA). They needed to sort out the quantum of subsidies, ease   processes and ensure payments could be made on time. The power distribution companies had to be ready to install net metering.

“Now all that is in place,” says Singh. A Solar Facilitation Centre has been inaugurated at the Rajiv Gandhi Renewable Energy Park to provide a single-window system for providing all sanctions and clearances.

“Nobody will have to run from pillar to post to install rooftop solar systems. All you have to do is to go to this one office and you will get all the information you want as well as all clearances and sanctions,” says Singh. The Centre will also tell citizens whom they can approach to get rooftop solar systems and net meters installed.

There were complaints that DHBVN was deliberately going slow on installing net meters since some 60 per cent of their revenue comes from Gurgaon. Singh says that under a renewable energy purchase obligation discoms like DHBVN have to ensure that a minimum percentage of their electricity is sourced from solar power. “Rooftop systems are included. If they take solar power their total cost of meeting their renewal energy purchase obligation actually comes down. Moreover, the power needs of Haryana are growing, so additional power coming from such systems only adds to the total power they can supply to consumers. They earn from such supplies while getting power at almost no cost,”  explains Singh.

DHBVN has now announced the certified manufacturers for two-way net metering — L&T, Genus and Secure Meters. “These meters have been tested and certified and can be installed for net metering,” assures Singh.  

“Net metering has started in Gurgaon,” confirmed Shubhra Puri, founder of Gurgaon First, a non-profit that works on urban issues. “With this there will be a surge in solar power. People are going for it to reduce their electricity bills and to lessen their dependence on the grid.”

Puri, who works closely with the administration, has been holding workshops bringing the administration, citizens and vendors of solar equipment together. She is now putting up a website with complete information on solar energy for citizens.

Another issue that confronted the administration was whether the grid was primed up to absorb renewable energy.

“Renewable energy systems are by their very nature unstable power generators. The power they generate depends on various environmental factors that cannot be controlled by us,” explains Dr O.S. Sastry, director-general of the National Institute of Solar Energy (NISE), based in Gurgaon.

“The amount of solar power generated at any given time depends primarily on the intensity of the sun’s radiation falling on PV cells – when the sun is blazing, more power will be generated, when radiation is somewhat less due to cloud cover or lower position of the sun in the sky, the power generated will be less and so on. So the amount of power they supply to the grid fluctuates widely,” says Sastry.

“The biggest problem of all grid interactive renewable energy systems is maintaining grid stability. We can certainly produce 100 GW of solar energy by 2022, as Prime Minister Modi wants. But unless we work out how to ensure grid stability in a situation where hundreds or even thousands of MWs of power can suddenly get injected into the system and then abruptly drop off, can only cause a disaster. The grid will collapse,” he explains.

But this problem too has been resolved. “To ensure grid stability we have got the discoms to allow net metering only for 30 per cent of the total power drawn from any specific transformer,” says Singh. 

This means that if a household or any other consumer has a total sanctioned load of, say, 1,000 units a month, the consumer will be allowed to set up a grid interactive rooftop solar system with net metering for a total capacity of only 300 units per month. “This is actually a large amount since the mandatory requirement is only three to five per cent of total sanctioned load,” Singh explains.

In practice, this 30 per cent cap on grid interactive rooftop solar capacity is expected to translate into no more than 10-15 per cent of the total load of any grid. Besides, many consumers will be opting for models that are off the grid. 

NISE, on its part, is planning to train people to become solar energy entrepreneurs. “We will launch an SPV soon to train people in providing services to consumers for setting up rooftop systems for a fee,” says Singh. “This will create employment and manpower to ensure rapid adoption of rooftop systems.”

A few RESCOs have started operations in Gurgaon but they feel government policy favours the consumer and not the entrepreneur. 

“Right now, some of the subsidies and incentives available for grid interactive rooftop solar power generation that are given to consumers if they set up their own plants are not available to RESCOs. But we are talking to the government and we expect this to be resolved soon,” says Sanjiv Agarwal, head of Amplus Solar, one of the channel partners of the Haryana government for installation of rooftop systems under the RESCO model.

Another option for consumers is the capital expenditure model. Here the consumer owns the asset and can claim accelerated depreciation and save taxes. He can enjoy capital investment subsidies offered by the government for setting up solar energy plants.

Most households so far have opted for off-grid solar rooftop solutions. “The future is bright in solar,” says Sanjay Verma, of Verma Trading Company, one of the first-movers in rooftop solar plants for households.

“In the last six months I have installed more than 50 KW,” he says. One of the first households he sold solar equipment to was that of Dr Krishan Kumar Chopra, a a retired professor of physics.  Verma sold him a 400-watt rooftop solar power plant in February 2015 for `48,000. 

“I am saving roughly `10,000 a year on my electricity bill and the system is working perfectly with no maintenance costs,” says Dr Chopra. But this off-grid system without any way to store the power generated allows only for limited capacity. “The government should help bring down the initial cost. Then I will increase my capacity,” he says.

Singh is confident that 50 MW of grid interactive rooftop solar capacity will get installed in Gurgaon by July-end. It will be less than the government’s target of 10 per cent of renewable energy for smart cities. But it is a beginning.

“Yes, definitely Gurgaon can emerge as India’s first city in terms of solar energy use,” says Sastri. “Gurgaon has lots of sunshine.” 

Reported by Arjun Sen   

Comments

  • Vinod Sharma

    Vinod Sharma - April 2, 2016, 3:59 p.m.

    The rates at which the agreement between BESTECH and the Solar Power Supply Company has been done is on a very high side, normally this should not have been more than 6.25 per unit for the next 25 years without the yearly increase that they have agreed. The Welfare residents association has not done its work diligently and honestly.