Harnessing Solar energy, Options for India

Table 7: Alternate Use of Capital Outlay
Micro-grid based on solar power
Number of villages (chosen so total capacity is 500 MW) 14,290
Load per village with 150 households (kW) (minimum load to supply
lifeline support)
Total capacity solar-based microgrids (MW p) 500
Current policy of capital subsidy (`/W p) 150
35
Capacity utilitisation factor of solar energy (%) 20
Annual gross generation by solar energy (million kWh) 876
Supply at bus bar after 5% auxillary use (million kWh) 832
If in addition a generation-based tariff offered (`/kWh) 4.25
Annual outlay for GBI (billion ` ) 3.54
NPV of GBI over twenty-five years (billion `) 32.1
Total outlay of capex + GBI (billion `) 107
Slicing the numbers differently, providing 5.5 million households each with 37 W panels or
providing 4,000 villages with 50 kW p microgrids will each work out to be 200 MW. The magnitude
of this must be judged in relation to the 75,000 villages 5 and 28 million households that are
currently un-electrified. a Hence, off-grid applications for rural electrification should be prioritised
considering it makes economic sense as well. Moreover, given the inadequacy of the grid, kerosene is
likely to remain the mainstay for lighting for many households. Kerosene is expensive, subsidised
and has adverse environmental and health effects. The net present value of providing kerosene
subsidy for fifteen years to 28 million households (at a 10% discount) will be over `166 billion. b
To support the aforementioned, even at today’s high prices, solar-based microgrids offer a
competitive solution compared to grid extension. A detailed techno-economics of grid extension
versus solar-based microgrids can be found in the section on rural electrification. Moreover, solar PV
is ideally suited for generation near demand centres. Furthermore, there is an urgent need for
meeting the electrification needs of rural India. Increasing the proposed capacity for rural
electrification via decentralised options would have a far greater impact than grid extension.
Perhaps it would have made more sense to have increased off-grid capacities in the earlier years of
the mission.
a Village electrification status RGGYV as of 30 March 2010.
b Assuming per household usage of 50 l per annum and a subsidy of `15.67 per l (subsidy amount for year 2009–
10).
India’s Solar-specific Policies CSTEP | Page 45