However, the high cost of solar energy in India has restrained people from adopting them. Keeping this issue in mind, we have devised the Power Purchase Agreement (PPA or Opex Model).

Characteristics of PPA:

PPA is a financial agreement that makes solar energy in India more accessible and economical. It awards several benefits to the user:

• The system will be installed at your home or workplace at zero investment cost.
• You only have to pay monthly for the solar units consumed at a predetermined unit rate.
• We care for everything, including system design, paperwork, permissions, and post-installation services.
• If your location provides net metering, you will get compensation for any extra electricity the system produces.
• Option of a buyout anytime as per pre-set clauses.

There are primarily 3 players in the complete implementation of the idea –

1.     The Consumer:

The benefits of solar power systems are not only personal but also environmental:

Personal advantages:

• Up to 30% of energy savings
• Your income won’t be affected by electricity price hikes
• Increase in property value

Environmental advantages:

• Reduces dependence on fossil fuels
• Decreases water usage to generate electricity
• Mitigates air pollution
• Helps slow down climate change

2.     The Investor:

• After approximately 3 to 4 years, the investor recovers the cost. The consecutive monthly payment, hereafter, by the customer is just profit.
• Benefits from the tax-saving policies provided by the government for using a renewable energy source.

3.     The Developers:

• The developers add to their business as they source the equipment for installation from the investor.
• Establishes a long-term relationship with the customer.
• Provides long-term revenue certainty.

Overall, the growth of solar energy in India with the help of PPA will enable you to reap the benefits of renewable energy without heavy investment. This will save you a lot not only on power but also on your electricity bills.

Nimbus Solar: A step towards sustainability!

People have realized that investing in solar energy in India not only protects the environment but effectively contributes to ROI.

As one of the reputed and long-standing players in the industry, Nimbus Solar Solutions has been an active contributor right from the stage of ideation to actual realization vis-a-vis the solar aspirations of its end consumers. It has played a significant role in the Solar Revolution in the country. As a brand that evokes trust, reliability and tremendous experience in the sector, the group is committed to delivering world-class services and products to its clientele.

Contact us here, and we will guide you with details for your solar setup and other PPA formalities.

In order to pay you for your services and motivate more people to do so, the government has introduced “Net metering”.

You can now send the extra electricity that you are producing back to the grid and earn energy reversals on the electricity consumed from your contemporary electricity connection. This is called net metering. A specialised meter is installed which turns backwards every time you send your energy to the grid. This reverses the units of electricity you have consumed from your electricity provider.

As a consumer how does net metering help you?

A straightforward benefit is that you get compensated for the power sent to the grid. In addition, it also helps you compensate for the cost that is incurred during the installation of a solar system.

For high consumers of electricity, net metering can help take some pressure off on peak hours. And needless to say, it contributes to the cleanliness of the environment as well.

Is net metering a motivating factor to adapt to solar power?

Yes.

India’s roof-top solar capacity is about 740 MW. Currently, we are utilising a very small fraction of that power. Experts have analysed that adaptation to solar power can increase by 60% if net metering is implemented effectively.

This makes net metering a very important aspect for energy policy makers.

If net metering is available, then why are consumers not shifting to this cleaner substitute and earning back energy reversal?

Let us answer this with the assumption that consumers have the funds to set up solar panel systems.

The consumers who have solar panels in place receive compensation for the electricity being sent back to the grid. So if you consume 5 units of electricity and you give 5 units to the grid, you earn 5 units through reversal. This seems to be a fair deal.

However, in actual scenarios, the cost of electricity is not constant everywhere. It is artificially kept low with subsidy. The cost of electricity with subsidy can cost Rs 3 to Rs 6 per unit.

The cost of producing electricity through solar power comes to Rs 10 per unit in the beginning. However, this cost reduces significantly in the long run. Now when solar electricity is provided back to the grid, the value earned is low.

Let’s look at it with an example.

Producing 5 units of solar energy costs Rs. 50, assuming that the cost of producing solar energy is Rs. 10 per unit.

If 5 units of solar energy is fed to the grid and 5 units of energy reversal is earned, then assuming that the subsidised cost of electricity is Rs. 5, the value earned is 5 x Rs. 5 = Rs. 25. Here you incur a cost of Rs. 50 and get back electricity worth Rs. 25. This is not a profitable deal.

But the situation is different in areas where the electricity is not subsidised. If the cost per unit of grid electricity is more than the per unit cost of solar, net metering becomes a value add for consumers.

The DISCOMs also face the heat of power subsidy. They have to recover their profits by charging the commercial and industrial segment. For net metering to be a viable solution it has to be a win-win situations for both consumers and DISCOMs.

If, policy-wise, the government can come up with something innovative that is beneficial to DISCOMs and consumers alike, can net metering be implemented immediately?

The answer is no.

Let us understand why. Power grids can have problems. When this happens workers are sent to the location to rectify it. It is ensured that the power source is cut off at the power grid so that no power flows out of the grid till the workers are on site. But a solar house, which is unaffected by the power cut-off at the grid, produces power and, through net metering, sends power to the grid. This poses a threat to the workers working on the grid. Hence the inverter in the solar panel system must shut itself down in case it senses a problem in the grid. This is called anti-islanding protection. This implies that the home running on solar power cannot use electricity because of anti-islanding protection. This will also lead to wastage of power generated through solar PV.

In addition to this, most of the regions in India suffer from frequent power outages. So net metering becomes very ineffective and is a key reason why consumers do not opt for it.

Anti-islanding is very essential and cannot be done away with. This is where innovation is required. If a system is developed that would allow users to use solar-generated electricity when power source to the grid is cut off due to problems at the grid, the use of net metering would become feasible.

Geographical regions in India that are working on net metering implementation

Based on industry discussions, it seems that only a handful of states and union territories, such as Andhra Pradesh, Telangana, Punjab, Delhi, Chandigarh and Karnataka, have begun actual implementation of net metering. Some other states such as Haryana, Tamil Nadu and Rajasthan are also showing interest; however, there is a lot of work that needs to be done to ensure effective implementation.