Want to Reduce Electricity Bills by 70% This Summer? Go Solar

Want good karma and save money while at it? Switch to rooftop solar.

Your electricity bills are now slashed by 60 to 90 percent!

That could be an advertisement for an energy-efficient appliance company, but it could also happen to you, if you choose to go solar. How?

1. Install solar panels on your roof
2. Connect them to net-metres
3. Generate power
4. On exceptionally sunny days or when you’re out on vacation, send the excess back into the local power grid
5. Get paid for sending excess power back into the local power grid!
6. Simultaneously, you will end up paying significantly reduced electricity bills

‘My Winter Electricity Bills Went Down by 95%’

Meet 75-year-old Dave Sood, who installed rooftop solar around two years ago. A businessman from Chattarpur in Delhi, Sood, who lives with a family of eight, says expensive electricity bills are a thing of the past.

The net-meter calculates the difference, whether positive or negative, of how much power you’re sending to the grid and how much power you are using from it after sundown.

This is how it looks:

Sood had apprehensions about installing the new technology in his house. But soon all skepticism was put to rest.

My winter bills have gone down from Rs 35,000 a month to Rs 1,500. My summer bills have gone down from Rs 75,000 to around Rs 20,000. I will recover all costs in three-and-a-half-years, I have already recovered almost half of my investment, which was roughly Rs 11 lakh.

Dave Sood, Businessman

Acknowledging that not everyone might be able to afford the initial investment capital, independent solar expert Aruna Kumarankandath says that the biggest issue with the adoption of solar power is that people don't see savings as an income opportunity.

“People don’t see they will eventually recover their money and hence are hesitant in investing,” she said.

Sounds Expensive? Wait, There Are Alternative Payment Models

Not everyone has the money needed for upfront investment (Dave spent around Rs 11 lakh) or the luxury of time to wait for years to recover costs.

But don’t swear off solar power yet. A number of firms now provide solar power installations and maintenance from start to finish, and they have attractive payment models too.

Arjun Srihari represents one such company – 8Minutes. He says they have options for those who cannot pay a large sum upfront.

We have developed a model which allows us to finance the system for you. You simply pay for every unit of electricity that is generated by your solar system and that unit rate is cheaper than what you’re paying to the discoms. You’re paying anywhere between Rs 9 - 11 per unit to the discom, to us you will pay Rs 6.5 flat.

Like 8Minutes, there are a growing number of players in this industry. With two nuggets of information – your average electricity bill and the approximate space you have on your roof – the company will be able to tell you the ideal system size you need, Srihari says.

Discoms Will Owe Me Money, Really?

Currently, according to net-metering guidelines issued in some states, not only do your bills get discounted but at the end of the financial year, the power discom has to pay you for the extra units of energy your panel generates.

While this will incentivise people to move to rooftop solar, it also highlights some problems in the power industry in the country.

“Why should already burdened discoms bear the cost of subsidising customers who produce excess power through solar?” asks Kanika Chawla from the Council of Energy Environment and Water. Adding that even though the burden is purely transactional, it is undue on the discom as they’re already riddled with enough problems like power thefts, debts and transmission losses.

Even though power discoms have narrowed their losses down, the power minister said the losses stand at Rs 17,352 crore in financialy year 2018 as reported by Livemint.

Advocates for solar, like Aruna Kumarankandath, however, argue that discounting bills for customers who produce excess energy are not enjoying a subsidy in the traditional sense. “It’s more of an exchange, a transaction. The customer gets paid for the excess energy he/she provides to the grid. It does, however, mean reduced revenue for the discoms. So the debate should be around making discoms more energy efficient and thereby more economically viable.”

‘Discoms Now Have To Control Excess Energy Generation’

As more people move to solar energy, power discoms will have to upgrade technology to ensure transformers can accommodate the extra energy generated on each rooftop. Upgrading entails expenditure.

Additionally, Kanika Chawla, from Council of Energy Environment and Water, says lesser people will draw energy from the grid in the day and continue to draw energy from the grid after sundown. During the day the discoms have to ramp down the production of energy using coal and the same goes up at night.

This will require discoms to innovate on energy storage devices. Which again, means additional expenditure for discoms.

But this is not an immediate concern, counters Aruna:

There is no doubt that investment will be needed for storage and to develop smarter grids which can support increasing solar power generation. But, this is an ongoing process. The immediate concern on the other hand is to encourage people to adopt solar.

India’s Energy Transition

India has set a path to achieve 100 GW power capacity through grid-connected solar energy, out of which 40 GW is targeted to come through rooftop solar installations by 2022.

Not everyone is optimistic about this deadline.

Aruna Kumarankandath believes the government may not reach the target by 2022.

Implementation of rooftop solar is taking place at a much slower pace and it seems unlikely that the government would achieve its 40GW target by 2022.

Report by PHD Chamber of Commerce and Industry and credit rating agency CARE Ratings in May, 2017.

While moving to rooftop solar technology is unknown territory for India, the move is needed to give the push to green energy and reduce dependence on fossil fuels which are limited and contribute to pollution.

(This article is being republished for Renewable Energy Day on 20 August, it was originally published on 7 June, 2018)