Solar Energy, a topic which is receiving close review as compared to any other sectors. And why not, it is not only a fabulous way to reduce the issue of various environmental problems but also a chance for us to balance the overutilized conventional resources. By switching to solar we all are reducing the pressure on our fast depleting resources such as coal, petroleum etc. Here I wouldn't be discussing about already known social and environmental benefits. Here I would be discussing solar energy as a business prospective, I see solar as a fantastic opportunity for business, especially when there is strong support from government in form of subsidy and incentive, it give every individual to monetize solar. From a MNC point of view, its a great way to add some CSR credit under their belt.
The Government of India has appointed Ministry of New And Renewable Energy, commonly called MNRE as government body to govern Solar Energy sector. Solar energy power plant are considered to be easy to earn instead of other renewable sources.There are different models or schemes through which one can generate electricity and sell it.
1. Power Purchase Agreement:
It is an agreement between an EPC contractor/ System Integrator and government for 25 years. The government purchase electricity at a fixed tariff decided by competitive bidding. Government releases tender periodically, and system integrator can participate in these tender, offline or on-line.
2. Net Metering:
It is a not necessary that an owner uses all its the electricity generated by the Solar PV system. In order to utilize the maximum from the system, government give opportunity to owner to monetize the unused electricity generated from PV system. For each unit supplied to grid , a certain tariff is provided OR can be compensate from the next billing cycle.
Incentive= (Electricity in kWh generated from Solar PV system - Electricity in kWh consumed)* tariff
Net metering policy also helps in lowering to the cost slab which indirectly helps in reducing electricity bill.
The net metering policy differs from state to state. So it is recommended to go through net metering policy before investing.
3. Gross Metering:
It is similar to net metering except in gross metering policy, instead of providing incentive on difference of the electricity unit; incentive is provided on total electricity generated from solar PV system. None of the electricity produced can be utilized by the owner. The policy is applicable in few state only.
4. Third Party Sell:
It is privatized version of power purchase agreement. In this case, the power agreement is made between developer and non-government body( private party) on a mutual tariff and mutual time period. It is generally referred to as RESCO model.
In RESCO model, the initial investment has to be made by developer.Before investing in such model, it is suggested to go through company profile and credit rating.
5. Captive Usage:
"Money saved is Money earned"
This is mainly applicable for industrial and commercial users. These include, manufacturing plants, cold storage, hotels and retail outlet etc. In the mentioned areas, the consumption is quite high. In order to reduce their monthly bill , it is advisable to install solar system. These sectors are blessed with large area, hence hundreds of kW of capacity can be easily installed.
6. REC
It stands for Renewable Energy Certificates. It is mandatory for any electricity generating company to resources to generate 2% through renewable resource and facilitate compliance of renewable power obligation. The government provides an flexibility to them of purchasing REC. The value of 1 REC = 1MWh, this means that person/ company possessing 1 REC has generated 1 MWh units of electricity. Now instead of installing on solar system, one can simply buy REC from other party.
The REC once issued shall remain valid for One thousand and ninety-five days from the date of issuance of such Certificate. REC would be exchanged only in the CERC approved power exchanges. For more details on REC,click here.
