State of Solar Energy in NCT of Delhi

Status of Energy consumption

There has been a paradigm shift in energy consumption across the world. Considering the negative impact of fossil fuels on the environment, countries are switching to renewable energy sources. In an attempt to become carbon neutral, countries are making all the possible efforts. Infrastructure is being developed to achieve this task. Businesses are pledging to be carbon neutral. Few countries like China, Japan, USA & Germany have progressed well to meet the targets. Switching to new renewable sources of energy, using eco-friendly products, reducing dependence on fossil fuels, all types of actions are being undertaken to be net-zero in emissions. Net-zero means stopping the addition of climate-warming gases to the atmosphere.

India has been actively promoting the use of renewable energy. There has been a constant growth in the installed renewable capacity of India.

Out of total installed capacity, India’s renewable energy capacity stands at almost 40%. The dependence on fossil fuels is still over 60%. This dependence can only be reduced when we will have the infrastructure to meet the energy demands only using renewable energy. With the number of efforts and policies in place, we are running towards making renewable energy the main source.

Renewable Shift

Talking about the current scenario. India’s total installed energy capacity is 388GW.

Out of this 40%, wind, solar & hydro are the major players. Out of all the renewable energy options, solar is the one that can be accessed anywhere as compared to other options.

Solar is being promoted everywhere. The installed capacity of solar has increased many folds in the last few years. States like Rajasthan, Karnataka, Gujrat & Tamil Nadu are at the forefront in solar installation with 8.91GW, 7.51GW, 6.09GW & 4.74GW solar installations respectively.

Delhi: State of electricity & Solar

Out of the total installed capacity of 100GW of renewable energy, 40.08GW is solar, out of which more than 34GW is installed in these 8 states.

Smaller states are picking up too, but they are not doing as good as bigger states, probably due to space constraints.

For instance, Delhi’s installed capacity is less than 0.2 GW.

Whereas demand for electricity is much higher as compared to other areas. The solar installed capacity is still low.

Due to increasing temperature, the per capita demand for electricity in Delhi is 260 units per month whereas the national average is 90 units per month.

According to a survey, people of Delhi turn on the air conditioner as soon as the temperature hits 28' C.

A few years ago, Delhi was relying on other states to meet its electricity needs. Things have improved a bit recently but electricity is still the major expense of its yearly budget as the electricity demand has increased continuously in the past few years.

In July 2021, Delhi witnessed a peak demand of over 7.3GW on a single day. Peak demand for the entire India went to 200GW on a single day in July 2021.

Talking about the dismal performance of solar installation in Delhi. The speed of installation is not at par with other states.

The solar policies in Delhi are better as compared to other states, the net metering policy is easier, execution process is easier, generation based incentive is Rs.2/Unit whereas in nearby states its Rs. 1/unit. Even after all these advantages Delhi’s solar installation is slower than the neighbours.

The cumulative solar installations in India in the last 4 years amount to 28GW, out of which only 0.14GW was installed in Delhi. Considering the energy demands and per capita consumption, this is not a good performance.

Delhi can definitely use more solar.

Delhi has not been able to put a good show as far as solar installation is concerned. It needs to take some concrete steps to accelerate this speed. But to find the solution, we need to understand the problem. Understanding the bottlenecks in a solar installation is very important. Let’s understand the challenges pertaining to solar installation in Delhi.

Challenges

The biggest issue that has crippled Delhi’s solar installation is lack of space. Solar installation requires huge space. Unlike other states, Delhi doesn’t have as much free space for solar installation. The biggest reason is having a very high population density, which stands at around 11,500 per sq. km. whereas the national average is 423 per sq. km.

This space issue is slowing the speed of large scale projects.

But Delhi is witnessing a growth in residential solar installation. People are rapidly switching to solar. Thanks to the government's scheme which is motivating people to get solar at their homes. Delhi gives subsidies to a fixed number of people every year.

For a plant from 0-3KW, you get a subsidy of 40%.

For a plant from 3-10kW, you get a subsidy of 20%.

In addition, You also get a Generation Based Incentive of Rs. 2.00 per unit.

But there are a few issues, due to which subsidy is not able to make a huge difference in the solar installation:

1. Not enough people seek subsidy, even though it is available.
2. The subsidy rates are decided through tender process, the rates change every year, making the whole process a bit tedious.
3. New technology and bigger systems do not fall into the purview of subsidy.
   

But the silver lining is people who want solar irrespective of subsidy. According to our demand survey, people in Delhi are more interested in a better system that can fulfil their energy demand instead of a subsidy.

One more reason, that makes subsidy less attractive is the lead time. The vendor installing the Solar system gets the subsidy instead of the person who is getting solar installed on his/her property, that too after an indefinite time, sometimes stretching to a year. This lead time blocks the cash flow and restricts them from doing more installations.

Another factor, which is affecting Solar installation in Delhi, is the challenges in execution. People are interested in getting solar, but the dearth of skilful people in the industry slows down the speed.

Solar as an Industry

The constant boom and demand for solar and the government's pro-solar policies have brought the solar industry to the forefront. While the bigger players are taking over the industrial & commercial sector. The smaller players are successfully catering the residential sector. Solar is generating good employment, as the survey suggests that on average each MW of solar installation is employing 26.7 people, which is certainly positive news.

In Delhi, people are going for solar even without subsidies. There is a huge demand on the ground. People are aware and want solar for their houses. This demand needs to be channelized to achieve the set targets.

EPC companies in collaboration with bigger companies are taking solar to every house.

Smaller players are playing a big role in taking solar to the masses. After all, people only can make solar a success by adopting it in large numbers. Once the mental block which holds back the people from going solar is gone, the solar will be adopted as the main source of energy which is what everyone is striving for. The mental block is generally associated with Solar myths people believe. We tried to address this issue in one of our blogs. You can read it here.

One more challenge the solar industry is currently facing is the demand and supply of components. Due to uneven demand, prices fluctuate a lot. Increasing taxes and tariffs are making components expensive.

Although taxes are increased on imported products to promote locally manufactured goods. But the locally manufactured goods are still in the improvement phase and products are not innovating fast enough.

Both local promotion and price control are important for the industry to thrive. A strategy should be devised for the advancement of local technology to compete with low price imported components.

Although there are a few challenges, the Solar industry has still seen a boom in the last few years. Most major corporations are betting on climate innovation which will definitely help achieve our targets. The scope is huge, as solar is a product that can be adopted by every household across the country in one way or the other.

Growth Potential

Solar’s growth potential is equivalent to energy requirements in Delhi as well as India. The installed capacity of solar is still less than 15% of the total installed capacity.

India’s target for installed renewable energy(RE) for 2030 is 450GW and the current installed capacity is 100GW, to achieve this target 40GW of RE needs to be installed every year. To achieve this herculean task, aggressive planning and execution are required. Current policies are good but not good enough to achieve this target. Solar will be a major component of this RE installation apart from Wind & hydro.

To reach this ambitious target and to make solar one of the major part of it, we need to streamline the demand and supply of the solar components and promote solar as aggressively as possible.

Delhi has come up with an easy net metering policy to achieve its solar target. For collective use of solar, Virtual Net metering & group net metering policies are there. These policies can definitely help in taking solar to every house, irrespective of available space.

Delhi is the only place which has successfully implemented these policies in India. These policies are widely successful in densely populated cities like New York. This gives a chance to every home to get their electricity from solar even if they lack space to put up a solar plant on their own roofs. Let’s understand these policies one by one :

Net metering:

Generating and using the energy you need and supplying the surplus to earn credits is known as Net metering.

Virtual net metering

Virtual net metering allows multiple users to benefit from the same solar plant. It can be used by people who do not own independent rooftops or do not have a suitable roof for solar. It allows a group of people to collectively own a solar plant. The energy produced by the plant is fed into the grid through an energy meter and the exported energy recorded by that meter will be credited in the electricity bills of each consumer.

Virtual Net metering can be used by residential properties only, it cannot be used by commercial properties as of now.

Group Net metering

Group net metering allows surplus energy generated from a solar plant to be exported to the grid through Net Meter and the exported energy is adjusted in multiple electricity meter connections belonging to the same individual or the same company. Although, all the connections need to come under the same discom.

Eg: An individual who has a bigger space at one property can benefit from it and export the surplus electricity to another property in his name, provided they have the same service provider.

Group net metering can be used by residential as well as commercial properties.

These policies allow using a single system for multiple houses and areas. Considering the benefits these policies have, it can solve space issues for consumers in Delhi.

Way Forward

If you are thinking of getting solar in Delhi. There are 02 reasons you must hurry:

• The high demand for solar is making it dearer. Import duty increase on components from next fiscal will further make it expensive.
• More the delay, the more is the wastage of money on electricity bills.

Solar as an energy source is the need of the hour to meet the ever-increasing demand for electricity and to protect the environment. In a few years, solar will be a major contributor to Delhi’s as well as India’s energy requirements. In fact, it can be the biggest contributor.

Considering the benefits of using solar energy and the positive impact it has on the environment, it’s the duty of every household to adopt solar as an energy source.

For people in Delhi, If you are living in a society, an apartment, a builder floor or an independent house, you now have a chance to go solar because of these empowering net metering policies.

Don’t wait to get solar, it saves you money every day and each day of wait is costing you money.

Get a free consultation today!