‘Faith is the bird that feels the light when the dawn is still dark.’
Is the Faith in Renewable Hopeful with Budget 2021-22?
With a lot of Hope to look further in 2021 and leave behind the 2020 blues, FM Sitharam proposed the Budget 2021-22. The BSE & NSE boosts portrayed the happiness of the investors and the acceptance of the proposed budget.
Here is a quick overview of the Budget fueling growth in the Energy Sector of India with focus on renewables.
Government has massively funded DISCOMs to uplift their loss-making status and upgrade the entire eco-system.
The government has dropped proposal on direct benefit transfer (DBT) of subsidy to electricity consumers and instead would first de-license the Electricity Distribution.
The consumers can select their own distribution company. However, it will not disrupt the existing licenses.
This move is intended to induce competition in electricity distribution and empower consumers to switch networks but will not disrupt the existing licenses.
In all, it will also induce fair competition and address monopoly concerns.
It will also assist DISCOMs for infrastructure creation tied to financial improvements, including prepaid smart metering, feeder separation, and up-gradation of systems.
PLI stands for Production Linked Incentive Scheme that is devised to enhance the AtmaNirbhar Bharat drive.
The motto is to promote the growth of manufacturing industries to become an integral part of the global supply chain.
The government has committed Rs.1.97 lakh crores in 13 sectors and the PLI is launched to create the manufacturing global champions.
The energy sector has been dedicated with 24%, Rs.4,500 crores for ‘High Efficiency Solar PV Modules’ which will be implemented by MNRE (Ministry of New & Renewable Energy).
Considering the current scenario of solar industry, the domestic manufacturing industry has limited annual capacity of around 2,500 MW for solar PV cells and about 10,000 MW for solar PV modules.
The manufacturing too moreover depends upon imported solar PV cells, PV modules and other raw materials.
Thus, the scheme is proposed to boost the domestic manufacturing needs and further create demand for locally produced balance of raw materials like EVA, Solar Glass, Backsheet, Junction Box, etc. to augment the entire Solar Manufacturing Eco-system.
The custom duties are increased to combat the imports and promote the domestic manufacturing focusing on the AtmaNirbhar Bharat mission.
This did not meet the expectations of more elaborate support for RE industry and especially solar industry.
The budget has Additional capital infusion of:
As part of Intended Nationally Determined Contributions (INDC), India targets to reduce carbon emissions intensity of its GD by 33-35% as against 2005 level.
It targets to install at least 40% of its electricity generation capacity through non-fossil sources by 2030.
The budget infusion would help the SECI & IREDA’s – the apex bodies for Indian renewables in contributing initiatives to fulfill the set ambitious targets.
Capital infusion will also enable SECI to set up innovative projects of with an investment of around Rs.17,000 Cr.
The International lenders are happy to channelize their funds to India’s large RE market through IREDA. Thus, it will enable IREDA attract and keep intact with the foreign investors.
Only 3 times in the past the budget has followed a contraction in Indian economy. This time it’s because of a global pandemic like in other countries. The government is fully prepared to support and facilitate the economic reset.
Budget 2021 has focused on growth, investment and jobs. The renewable sector, especially solar manufacturing and related services has got the keen eye from investment prospect which will help to create jobs.
The reviews of all the investors and solar industry delegators reassure that the faith for better recovery of the declined repo rate is up and high.
PIXON – a Marwadi Group Company into Solar panel manufacturing and solar EPC installation services is hosting Solar Gandhi – Dr. Chetan Singh Solanki.
Dr. Solanki is also known as the Solar Man of India. He has authored about 100+ research publications in international journals, several books on Solar and Renewable Energy and 4 US credited patents with a few more in review.
He has bagged several awards for his work. Starting his journey from a small village with no bus connectivity yet and a primary school with just 2 classrooms now, he studied in IIT-B and further in Europe to bag the title of Doctor. With knowledge across the globe, his roots are still intact to the struggles rural areas face. This is how his journey to contribute to society began. People joined and accolades followed.
Dr. Chetan led many environmental drives in the nation like: ‘Is winter fridge band kar’ He undertook a global movement – a solar yatra to 30 countries with the mission of providing 1 million students to make their own solar lamps. This agenda with a base of Gandhian principles tagged him the title of ‘Solar Gandhi’.
He has now taken a national movement on name of Energy Swaraj Yatra 2020-30. This is a 11-years stay-and-travel in a solar bus across the country to spread Solar Energy Awareness. The motto is also to promote the solar energy adoption in context of, “By Locals for Locals”.
PIXON bestows the name of MARWADI GROUP and the trust people lay upon it since past 27 years.
The PIXON company manufactures solar panels with state-of-the-art technology and turnkey machinery of 400 MW line capacity. The industry is spread across 65,000 sq. m of land and has EVA film (a raw material) manufacturing line as well.
The company is proud to tag ‘Make In India’ on the solar panels, while contributing to the Aatmanirbhar Bharat Abhiyan and Youth Employment post the Covid-19 blues.
Vis-à-vis, PIXON provides Solar EPC and end-to-end installation solutions. In no time, PIXON has pioneered a lot of solar projects in Gujarat. With subsidies open in all the residential, commercial and industrial sectors, the company is penetrating into the market in leaps and bounds.
As the world adheres to the solar energy revolution, PIXON envisions to globally provide efficient solar energy products & solutions. Thus, contribute and enhance the Global Climate Sustainability.
PIXON with message of “Solar is the new Green!” shall host the ENERGY SWARAJ YATRA with the message to adopt solar and “By Locals For Locals”. The Solar Gandhi himself will visit the PIXON factory, to provide his valuable insights and good wishes to the Company & its enthusiastic team.
After major achievement of 173 GW of renewable energy before the set target of 2022, our honorable PM Modi aims big with 450 GW target by 2030. PIXON is on the national mission to support the PM in achieving this target and addressing the climate change in an integrated, comprehensive and holistic manner.
The Gujarat Government under guidance of our CM Vijaybhai Rupani launched new Gujarat Solar Policy – The SURYA Gujarat, wherein the residential rooftop solar has no bars to maximum capacity installation. Thus, opening a channel for passive income via net-metering. The subsidy scheme is also active providing upto 40% benefits for residents. The motto is to reduce the unit rate and overall cost of electricity.
Net metering is a billing mechanism that credits solar energy system owners for the electricity they add to the grid.
Raj installs Solar PV System at his factory rooftop. He uses the energy consumed by his factory. The extra electricity is sent on grid. He is credited for it for later use.
Raj installs solar power plant at his factory that generates 1000 units. He uses those 1000 units over the month.Assuming the tariff rate of Raj’s locality as Rs.7.50, he saves Rs.7,500 (1000 units* Rs.7.50/unit).
However, this would be the ideal condition. Considering the system cost, Raj will get LCOE* at Rs.1.50/unit, much less than what government sells.
On this scheme, the government just charges nominal regulatory fees to the solar consumers and installers. The Government generated electricity and DISCOMS face the reduced profit margins for same.
In gross metering, a consumer is compensated at a fixed feed-in-tariff for the total number of units of solar energy generated and fed into the grid. The consumer then pays the DISCOM at a retail supply tariff for the solar power consumed.
Raj installs Solar PV System at his factory rooftop. The entire energy generated is sold to the grid at a predefined unit rate defined by the government. The regular electricity consumption is taken from the grid and billed as usual.
Continuing the example of Raj and considering the regular billing mechanism:On consumption of 1000 units, Raj would pay Rs.7500 (Rs.7.50/unit*1000 units) as his bill. Raj installs solar power plant at his factory that generates 1000 units. As per the gross-metering concept, the entire electricity is sold to the grid at unit rate of Rs.3.00/unit. Thus, Rs.3000 (1000 units*Rs.3.00/unit) becomes the ideal saving of the consumer excluding the project cost. However, this would be the ideal condition. Considering the system cost, Raj will get LCOE at Rs.5.50/unit.
On this scheme, the government charges regulatory fees to the solar consumers and installers. The Government also gets costing benefits on generated solar units by the consumers. But, it comes with a big question mark from the CNI perspective, considering the solar PV system adoption and installation won’t be considerable.
The Disparity of Net-metering and Gross-metering to benefit the consumers and the government both is much visible and has caught the limelight.
BANKING CHARGES clause can help attain this balance. As per the clause, the consumer is entitled to pay banking charges to government instead of completely selling it to the government. The banking charges are almost half the charges of tariff-feed-in of gross metering making it a more viable option for both the consumers and DISCOM.
On consumption of 1000 units, Raj would pay Rs.7500 (Rs.7.50/unit*1000 units) as his bill.Raj installs solar power plant at his factory that generates 1000 units.As per the banking charges concept, the consumers might have to pay banking charges on generated amount at rate of about Rs.1.50/unit. The net banking charge, Raj has to pay is Rs.1500(1000 units*Rs.1.50/unit).The electricity cost to Mr. Raj otherwise would have been Rs.7500(Rs.7.50*1000 units). But now he has to pay the bill with banking charges. Thus, the net saving for Raj is Rs.6000 (Rs.7500 – Rs.1500).However, this would be the ideal condition. Considering the system cost, Raj will get LCOE at Rs.3.00/unit.
The major benefit to government is of RPO & Transmission loss saving. Moreover, it gets additional amount of Rs.1.50/unit of solar as permanent source of income.
Banking charges is much viable and profitable option for both the consumers and the DISCOM or government entities, over the gross metering.The flow of solar units trade and the definition of Banking charges is not provided in the policy
The Net-metering, applicable up to 10kW of systems has been a bang-on model accepted by the people with bumper perks and benefits. Removal of capacity restriction has opened doors for people to have a new source of income generation.
The Gross-metering, applicable above 10kW of PV system has arouse a lot of debates in the Solar Industry of India. The saving margin and project payback are reduced and lengthened to greater figures respectively.
The Banking Charges clause instead of Gross-metering has been pitched by the Gujarat State government in their power policy which seems to be a better model for both – the consumers and the DISCOMS or government entities.
PIXON supports and talks in the favor of the Gujarat Solar Power Policy that talks of Banking charges over the gross-metering implication. However, a lot of clarity is still required for smooth conduct. Probably, what everybody is looking for in the upcoming Implementation Policy (for Gujarat at least).
The Government of Gujarat has recognized the growing impacts of the climate change at local and national levels and has formulated various policy initiatives to mitigate the impact of this rising concern.
Here, we summarize the new initiatives the government has involved in content with the existing policy until the implementation guideline is rolled out.
As per the new policy, the Residential Consumers can now not just settle but also sell the additional solar units generated by their rooftop solar PV system. This shall benefit those owning a bigger rooftop space.
No restriction on installed capacity
Same as in existing policy.
Incentive / Subsidy
As per Government of Gujarat, scheme announced from time to time
As per biling cycle
Transmission & Wheeling Charges
As per the provision of Gujarat Electricity Duty Act, 1958
Surplus Injection Compensation
Rs.2.25/Unit for first 5 years, thereafter 75% of lowest tariff discovered in GUVNL bid
Same as in existing policy
For Third-party Sale
75% of lowest tariff discovered in GUVNL bid.
Cross Subsidy & Additional Sub charges
Not applicable for self-consumption.
Applicable in case of third-party sale.
Power Sale Agreement
Only Ownership Allowed
Developer can set up solar plant on Rooftop and enter into lease agreement & Power Sale agreement.
As per the new policy, the Industrial, Commercial, Institutional and other Consumers would be charged for additional banking charges. It indicates the prime consideration of revising the entire grid system while integrating the micro-grids that store and manage the solar generated electricity.
Just like the internet set its space in communication networking as data-network, the solar electricity seems to set its space in the existing grid system as micro-grid storages.
Same as in exisiting policy
Energy set-off; Between 07.00 hours to 18.00 hours of same day
For HT/EHV consumers:
For LT demand-based consumers:
Energy set-off; Between 07.00 hours to 18.00 hours in the billing cycle basis.
For LT Consumer : Other than demand-based consumers:
Energy set-off shall be on billing cycle basis.
As decided by GERC from time to time
MSME units and other than Demand Based Consumers:
Rs.1.10 per unit on solar energy consumed
For demand-based consumers:
Rs.1.50 per unit on solar energy consumed
For Government Buildings:
Rs.2.25 for first 5 years, thereafter 75% of simple average of tariff discovered in GUVNL bid
75% of simple average of tariff discovered in GUVNL bid
Cross Subsidy & Additional Subcharges
Solar Projects Installation & Usage of Generated Power with collective ownership of more than one consumer investing / holding 100% Equity amount shall be allowed in the ratio of their equity.
For Industrial, Commercial, Institutional & Other consumer
The state government finally initiates the third-party sale model for Gujarat. This entire clause is added to attract investors opting for regular and hassle-free passive income.
Energy set-off; Between 07.00 hours to 18.00 hours in the billing cycle
For LT Consumer other than demand-based consumers:
For Demand-based consumers:
Rs.1.50 per unit on energy consumed
Rs.1.10 per unit on energy consumed
The new Gujarat Solar Power Policy 2021 allows the third party sale for generated solar units for all the consumers, that is, residential, institutional, commercial and industrial. Thus, the consumers can install the solar PV system based on their investment portofolio and sell any of the excess electricity to the government. The twist for the Institutional, commercial and industrial consumers comes with the new banking charges applicable for the storage of the solar units.
As per the new policy, the government looks forward to cut down the dependency on conventional coal-based power generation and help the MSME industry in its production cost. The operative Period for the new policy is for five years, that is, upto 31.12.2025.
After all the setup is ready-to-use, there comes a county inspection step in between you pulling-up your solar switch to go solar.
A government engineer or electrician comes for final inspection of all the wiring done with respect to your solar setup and the utility grid. Your installer shall do the scheduling and paper work for the same.
All the installation and wiring do meet the pre-set permit standards and safety measures. Your time investment, and execution process turns out to be successful. All the patience was worth the wait.
The time this phase depends on the type of solar power installation you’ve opted for. If it’s off-grid, as in, off the electricity grid, you can pull-up your solar setup after proper wiring check. But if your setup is hybrid or on-grid, that is, if it has an electricity grid associated, the engineer inspection and permit is must and shall take time based on your locality and county. It can range from a few days to a few weeks depending on the queue.
It is advisable to initiate your solar installation process in off-season time, that is, mostly winters to avoid the permit queue or delay from service-provider’s end.
Based on all engineering assessments; the solar panel installation plan, area on rooftop, height elation if any, and other design parameters are approved.
Based on the design, the installer shall be able to give a final quote. The varying charge section can be defined with tentative time the setup shall take to get installed. On approval, they provide for the list of documents you would have to submit for the entire process.
You can get your final quote and schedule of the solar installation process. You can decide to stick to your service provider, negotiate or switch it based on your experience of the process.
This entire process takes in account the experience of both, the engineer and the solar installation vendor. Thus, it can take a day to one week for your design approval and quote finalisation process.
After the site has been assessed by your Solar Service provider, an expert engineer is supposed to visit your site to get into the details and provide the installation assurance and safety measures.
The Engineer would’ve already considered the azimuth, direction of roof, shading on the roof and other future aspects that might affect the Solar Panel setup and its efficiency. The engineer also inspects the life and quality of your rooftop and whether it can withstand the solar setup in the long run of about 25-30 years. All minute details like shading factors, angles, increasing height and others are considered, to give a final design approval in compliance with long-term safety and efficiency.
You get to know if your roof is strong and fit enough to go green with Solar Power installation. There is no point investing so much that it can be a trouble in the next few years for all.
This process can take about 1-2 weeks based on the engineer’s availability.
Finding a solar installer – the prime step is akin to deciding which automobile dealer you would like to buy the car from, based on the aforementioned example.
Solar installers are people who provide EPC services to set up solar power over your rooftop and deal with all the documents and processes involved. They shall investigate your house-roof location, the angle, and unit consumption pattern based on your previous electricity bills of the house. They shall help you decide the capacity of the solar setup your house shall need based on all electrical appliances used and provide an estimated cost.
The first thing you get the clarity on, is the prime factor – if your location is fit for going solar or not? The other steps won’t be a concern if this fails to pass. You get to know the installation capacity to be put up on your rooftop with an estimated quote. You get clarity on the solar setup charges and other additional charges of installation and labour.
It is always good to take a viewpoint of multiple vendors, and come to a conclusion. This entire process of setting up visits and getting reviews might take you a week or even a month. It depends on vendors’ and your time availability and your choice of installer. Any referrals from friends, family or neighbours can be time savvy and cherry on the cake.