Harnessing Solar energy, Options for India

1.2.3. Solar PV Microgrid
1.2.3.1. Overview
The rationale behind a microgrid is that by bringing the generation of electricity closer to the site of
consumption, one can avoid the T&D losses of grid extension, especially in remote regions.
Additionally, it can alleviate the demand–supply gap and provide more reliable power to rural areas.
Given the variability and intermittent nature of solar energy, a microgrid based on a hybrid system
of solar and mini-hydro or biomass makes more sense. In this study, a solar–biomass hybrid option
is analysed as an illustration since cost data for biomass was more easily available. The optimal
allocation of renewable resources will be site-specific, constrained by the availability of resources.
Unlike other resources, solar energy is unlimited if the region receives bountiful sunlight. The
microgrid is a potential solution for a village or a cluster of villages that have houses in close
proximity. The technology is bound to work; the rural poor might be willing to pay for an assured
supply of electricity, but even so it has to be borne in mind that sustainable long-term operations of
the microgrid is difficult in the absence of solid institutional mechanisms.
Under the current framework, the government provides a subsidy of `150 per W p of installed
capacity and a soft loan at 5% for the rest of the amount less the promoter’s contribution of at least
20%. 22
1.2.3.2. Techno-economic Analysis
A typical village is assumed to have 150 households with each having an energy requirement of 1
kWh per day. Street lighting, an electrified drinking water pump and community buildings such as
health clinics and schools are considered essential needs. At any time, any additional demand can be
easily augmented with solar energy. Moreover, if there is demand for a cottage industry or any
commercial activity, additional solar panels can be added and the commercial entity can be charged
a higher rate. Agriculture will be treated separately in a following section.
Apart from the DDG system, the microgrid will consist of a low voltage (LT) distribution network,
individual household connections, meters and a battery bank. Based on these assumptions, the load
of such a village is computed to be 35 kW (See Appendix 1: Assumptions in the Section on Rural
Electrification). Figure 9 has the economics of a microgrid that is based on 50% solar and 50%
biomass, and 25% solar and 75% biomass. This is done solely for the purpose of illustration. The top
x-axis is the system cost of solar PV that is likely to go down in the coming years, while the bottom x-
axis is the distance to the grid used for the calculation of grid extension costs for the village. The y-
axis is the LCOE of both renewable-energy-based generation as well as grid extension.
Solar Photovoltaic Applications CSTEP | Page 68