GHMC’s solar power plan faces roadblocks

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There are no takers for the Greater Hyderabad Municipal Corporations’s solar project. In a bid to promote solar energy and save power charges, the corporation had decided to install roof-top grid-connected power generation plants on its properties.

The corporation, in September 2016, had conducted a survey to identify suitable properties to set up roof-top solar panels. It had hired two consultants for the said purpose where they had identified 42 properties from a total of 942, in February 2017. The corporation officials claimed the installation of solar panels would save a monthly expense of Rs 52.5 lakhs.

 

However, a year has passed, but the project still remains on paper. Officials claim that the executing agencies had been shying away from the project since the GHMC had asked them to install the solar panels for free and that they would only pay them later.

According to GHMC officials, the corporation has been consuming 1 lakh units per month, where the cost per unit was marked at Rs 7. The corporation expects to supplement nearly 47% of its total energy consumption through solar power, where the unit cost would be reduced to Rs 3.

The corporation has two options, to either go for the Capex model, where the corporation has bear 15 to 20 per cent of the total cost of the project, prior to its execution or the Resco model, a renewable energy service company that would provide the necessary capital for installing and operating the roof-top solar system in exchange for a power purchasing agreement with GHMC.

However, India has currently installed only 15 per cent of the total roof-top solar projects under the RESCO model. This is mainly because renewable energy service companies face the same key barriers as the consumers – that is, little access to affordable loans despite strong products and proven business models.

In both models the corporation has to enter into an agreement for a period of at least 25 years. Citing financial implications and the size of the project, the empanelled agency has opted for the Capex model, while GHMC can only afford the RESCO model.When queried on the subject, a senior GHMC official said that the roof-top solar project would take some more time as the empanelled agency was not interested in the RESCO model. He said that due to the project viability and the financial aspects of the project, the corporation could not go ahead with the project.

“If the building was to be renovated or if it collapsed in 25 years, the Capex model would not be viable, as the empanelled agency would charge for the replacement of the solar panels. The corporation would have to bear a huge financial burden, hence the Capex model has been ruled out,” he said. He said that the corporation was now planning to approach the Telangana State Renewable Energy Development Corporation (TSREDCO), where the unit cost was fixed at Rs 4.80.

The official further said that even though the minimum requirement to accept the RESCO model was 100 kilowatts (KW) per building, the corporation has decided to convince it to reduce it 40 KW. He said that the cost per KW was Rs 65,000 and it will be Rs 49,000 after getting a 30 per cent subsidy from the centre.

He said that two private agencies, M/s. TUV South Asia Pvt Limited and M/s. Energy and Resources Institute had already done the survey and had identified 42 buildings that would be suitable for the setting up solar panels. He said that if everything went well the project could take at least six months to take off.

 

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