Cons of Starting a Solar Energy Start-Up in India

 

 

Our generation is witnessing an unprecedented decline in the quality of our environment. Carbon emissions have increased by a whopping 12% since the year 2000. Stratospheric ozone has been depleted by 5 to 6 percent at middle latitudes.

 

India’s installed power station capacity as of 30 November 2020 is as follows:

Coal(MW)	Lignite(MW)	Gas(MV)	Diesel(MV)	Nuclear(MV)	Hydro(MV)	Renewable(MV)	Total(MV)
199,594.50	6,260.00	24,956.51	509.71	6,780.00	45,699.22	90,399.11	374,199.04
53.34%	1.67%	6.67%	0.14%	1.81%	12.21%	24.16	100%

 

From the above statistics, we can conclude that India produces a majority of its energy through coal. The second-largest mode of energy generation in the country is renewables. The term renewables include solar, wind, biomass, waste-to-energy, and small-hydro.

 

The potential for solar energy in India is around 750GWp.  Rajasthan in the north and Andra Pradesh, followed by Tamil Nadu in the south, consists of cities that receive sunlight for the longest duration of the day. 

 

 

Starting a solar energy business sound like a wonderful opportunity, given the fact that it is getting a ‘good’ push from the government as well as households can cut down on their electricity bills. But is solar energy company a scalable and profitable business model? To answer the question, first, we have to analyze the cons of using a solar panel system.

 

Cons of using Solar Panels by households

 

·       Location and Sunlight Availability

 Your latitude is one of the main factors in determining the efficacy of solar power. Not all locations get the same amount of annual sunlight, with the efficacy of solar power dropping dramatically the farther you get from the equator. Not all places receive the same amount of sunlight for the same duration of the day. Cities in Rajasthan receive the optimum amount of sunlight compared to any parts of the country. If you are situated in a city which does not adequately receive sunlight, your solar panels will not produce energy in an efficient manner.

 

·       Installation Area

Solar panels demand a significant area for their installation. The area that these panels occupy, will not be available to be used for any other purpose for the next 15 to 20 years. The roofs on which the solar panels are intended to be installed are needed to be replaced if the life span of the roof is approaching because changing the solar panels installed on the roof will be a very costly process since the whole setup has to be detached from the roof.

 

·       Inefficiency

Most solar panels on people’s houses convert only 14% of their available energy into power. Even today’s most efficient solar panels convert only 22% of their available energy into power.

With a large upfront investment by the households, these inefficiencies come at a cost.

 

 ·       High initial cost

The initial investment in a solar panel system by a household in India ranges from ₹80,000/- to ₹6,00,000/-. Such an initial investment will instantly discourage a household to invest in the technology since the returns on the investments are witnessed after a very long period.

 

·       Storage

The solar panels will generate energy only during day times, that too during the sunny periods of the day. In order to utilize solar-generated power, a storage system is needed. Such a storage system to store the energy required to run the household even during the night times is non-existent in India.

 

 

 

 After analyzing the cons of using a solar energy system in households, it is also equally important for an entrepreneur to analyze the cons involved in the usage of the solar energy system in the commercial world.

 Cons of using solar energy system in Commercial buildings

·       Solar panels will increase the commercial business’ dependency on weather 

 There is no question that solar panels decrease dependence on electrical companies and increase dependence on the weather, which can be less predictable. When there are cloudy days, it may not be good for the system’s efficiency of any business, and having too many in a row can even lead to higher power bills than expected.

 

·       A layout with too many trees and buildings can be disadvantageous for the use of solar panels 

If the commercial building is surrounded by tall trees or buildings, the solar power system may never reach its full potential for efficiency. Even in the sunniest of conditions, the solar panels still won’t be able to function properly if they are blocked by trees or buildings.

 

 

·       Commercial solar panels require a hefty upfront investment 

Installing a commercial solar energy system can really break the bank if the one investing is not prepared for it. Even with tax breaks and rebates, solar panels can still be a huge investment that needs a lot of consideration. There is also the issue of whether the electrical system will have to be reconfigured especially when the solar power system is to be added to an existing structure. There might also be the need for roof replacement. Adding these factors already makes the installation of a system in an existing building more expensive than installing one during new construction.

 

·       There are many differences in the quality of solar panel

Commercial solar panels options are not the same. There are different choices such as monocrystalline, polycrystalline, and thin-film solar panels. To provide your clients with more information, here are the features of these mentioned panels: 

1)  Mono-crystalline panels – This kind is the oldest form of solar panels. Mono-crystalline solar panels produce the largest amount of electrical power.  

2) Poly-crystalline panels – These solar panels require less space as compared to mono-crystalline panels. However, in spite of being less space sufficient, these panels also offer great quality.  

3) Thin-film panels – This kind of solar panel is the most affordable option in the market. Unfortunately, thin-film panels also offer the least amount of efficiency.

   Another consideration aside from the quality is also the reputation of the brand in order to find the best product or service available.  

 

     

 

The Ultimate Barrier for solar Business – India’s Weak Power-Grid

One of the typical calculations that power systems operators do is estimate how much renewable power the grid can handle. Typical figures from elsewhere are in the range of 20-30 percent, with more requiring significant investments in the transmission of peaker plants. India is different because its grid is very weak and unstable, and instead of having a reasonable reserve margin (typically 15-20 percent in the west), there is a shortfall in the grid, officially in the range of 5 percent or so, but actually much higher. Even the Grid Code is modest, recommending (but not mandating) only a 5 percent margin.  The grid is kept afloat through massive “load-shedding” (feeder-level cutouts of supply). Such load shedding even impacts options like rooftop solar, since grid-tie inverters are designed to switch off during outages or faults, for safety reasons. But if the grid is down so much, then the economics of rooftop solar takes a massive hit due to non-supply of power. 

 

There are other technical reasons why the Indian grid is weak, including lack of ancillary services (systems designed to keep the grid stable, instead of just pricing kilowatt-hours), and even a lack of time-of-day pricing for bulk procurement of power. There are few peaker plants (which would operate only some 5-10 percent of hours in a year), since there isn’t sufficient incentive for these. Without incentives for plants that can ramp up (or down) quickly but may not get used much, how will the grid handle 20 percent renewables? Even worse, the types of plants capable of fast ramping are limited in near-term growth in India—hydro-power (due to land and social/environmental challenges) and natural gas (due to supply constraints).

 

 

Conclusion

The solar panel manufacturers and middle men are targeting the well to do sections and apartment blocks. But the individual home owners of middle class background are not willing to invest in solar panels due to many of the above-mentioned reasons. It is not exactly viable to start a solar energy start-up. Instead of solar power, the entrepreneurs can concentrate on other renewables which are stepping into the arena.