SECI prompts a rooftop solar revolution with 500MW tender

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India is taking a giant leap in green energy generation with a mega tender of 500 megawatts of rooftop solar energy that will double the country’s capacity in this segment and can trigger more such projects as it may cost less than conventional energy. State-run Solar Energy Corporation of India (SECI) has invited bids for 500 MW of projects across various states and will open the bids on June 3. Rooftop solar plants, which save transmission costs by supplying energy where it is generated, are already economically viable for top-paying customers because such supply is cheaper than what commercial establishments pay distribution companies for electricity from the grid. In fact, many entrepreneurs have set up solar rooftop plants free for commercial establishments and earned money by selling the output profitably but at a cheaper rate than the grid supply. In western countries, many domestic consumers have reduced utility bills with solar rooftop units, which puts pressure on distribution companies to charge higher rates to the remaining customers to recover their costs. This in turn gives consumers a bigger incentive to abandon the grid – a process called ‘utility death spiral’. Rooftop projects are a key part of the government’s massive expansion plan in renewable energy and its commitments in global climate talks. India has a target of 100,000 MW of solar capacity by 2022 including 40,000 MW from rooftop units. It has a potential to install 124,000 MW of rooftop projects, which amounts to nearly half of India’s total electricity generation capacity. SECI’s latest tender will almost double the country’s current installed rooftop capacity of 525 MW, built over many years. The tender dwarfs SECI’s previous tenders, seven of which were issued since 2012 for a total of about 200 MW. Out of which 120 MW have been allocated and 42 MW commissioned. New projects can be built by renewable energy service providing companies through what is called the RESCO model in which the consumer does not have to pay for the installation, but is charged a tariff for the output.Bids have also been invited under the capex model, in which government subsidies are provided for the installation. Winning bids will be eligible for a subsidy of 30% on the capital cost, provided the roofs of residential buildings, institutions such as schools and hospitals, or those related to the social sector are used. There will be no subsidy for solar plants set up on the roofs of commercial establishments or government buildings. Late last year, the union cabinet allocated Rs 5,000 crore from the Clean Energy Fund over the next five years to provide this subsidy. The size of projects can vary between 25 kW and 500 kW. It will be developer’s task to find the rooftops to install the plants.
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