Indian Union Budget 2016-17 & Solar Industry — March 9, 2016

Indian Union Budget 2016-17 & Solar Industry

Author: Kapiel Dongle, Business Head at Fourth Partner Energy Pvt. Ltd

All in all, the budget did not bring any ‘Wow’ moments for our industry. However, subtly, it did indicate that incentives for solar will slowly be withdrawn while grid prices continue to rise.

Limited Accelerated Depreciation:

From April 2017, Accelerated Depreciation will be limited to a maximum of 40% which currently stands at 80%. Claiming Accelerated Depreciation for tax saving purposes was a huge incentive for industrial and commercial consumers to go solar. Although, solar already makes commercial sense, April 2016- 17 will see a massive capacity additions in order to use this incentive while it’s available. If prices don’t fall at rate which ‘compensates’ for the use of A.D in one year, then uptake of solar is expected to slow in the financial year 2017-18.

Increasing the Clean Energy Cess or the Clean Environment Cess:

The cess on coal, lignite and peat has yet again doubled from INR 200/ tonne to INR 400/ tonne. The previous financial year it was doubled to INR 200/ tonne from INR 100/ tonne. This would mean an increase in funds available for ‘Renewable Energy’ of which ‘Solar’ forms a large part. This means all those eligible for subsidy in Solar PV can be a little more confident about receiving it after the project is done. If we look beyond the funds, the increase in the cess will also shoot current power tariffs . This would incentivise consumers at least in Metropolitan cities of Dehi, Mumbai and Kolkata to consider going solar which has an LCOE lesser than their current tariffs.



Author: Kapiel Dongle, Business Head, Fourth Partner Energy Pvt. Ltd.

Residential Rooftop Solar Overview

Energy costs for residential buildings are telescopic in nature. As the energy consumption increases, tariff increases in corresponding slabs.

While commercial and industrial entities have adopted solar quite early, adoption of residential solar has picked up lately – Rising power costs and Government of India’s push towards solar adoption has played an important role. Residential Solar is expected to catapult from 130 MWp currently to over 10X in the next 5-7 years. **

In the long term, every rooftop is a generator of solar power. In countries such as Germany, rooftop solar on residential premises has been very successful. In 2014, solar energy covered approximately 7% of Germany’s net electricity consumption.

Evaluating the case for Rooftop Solar Photo-Voltaic System (SPV)

To help evaluate whether a residential rooftop solar system will work for a customer, the customer needs to consider several factors.

Firstly, availability of Sunlight – Is sufficient sunlight available for most of the day, throughout the year? India has one of the highest solar irradiation levels in the world and plenty of sunlight.

Secondly, availability of rooftop space for the system size needed – Is there sufficient shadow-free area on the rooftop? Typically, a 1 kWp system requires 100 sq. ft of shadow-free area on the rooftop.

Additionally, economics of the investment – Are the savings worth the investment? Savings depend on the customer’s cost of power and effective savings.

Lastly, the local permits required – What are the approvals/permits required from local bodies ? For an off-grid rooftop solar system, no approvals are required from any regulatory body. For grid-connected rooftop solar system, a No-objection certificate (NOC) is required from the DISCOM (power utility player) for the installation of Net Meter. Typically, the solar installer / RESCO (Renewable Energy Services Company) assists the customer in the process.

For typical residential houses, a system size ranging from 1-5 KWp single phase (according to the requirements) can be a suitable rooftop solar solution.

For residential societies / apartment complexes, a larger system is more suitable as the energy consumption is higher. The size of system depends on the available rooftop space – can be 10 kWp – 500 kWp. A 10 kWp system can support intermittent lift load, pumping load, common hall AC load, and lighting load during day time.


Key phases in the lifecycle of installation of Rooftop Solar Power Plant include System Design & Engineering, Construction of the Plant, Quality Check, Commissioning, Handover to Customer, and Post-installation O&M Services.

Components of Rooftop Solar System include Solar PV Module, Battery Bank (optional, for backup), Inverters (for AC Loads), Charge Controller, Wires and other accessories, Netmeter  (for grid-connected system)

Net Metering

In a grid-connected solar system, any excess solar power generated (units generated – units consumed from DISCOM) can be fed back to the grid.

Net metering framework is offered by a state under which the power provider (DISCOM) essentially pays you the retail price (as decided by the DISCOM) for the electricity you feed back into the grid.

So far, 25 states and union territories have put in place net-metering guidelines (draft and approved) for rooftop solar installations.**

Economics of a Residential Rooftop Solar System

The customer saves money through the generation of solar power. Other than the upfront cost of the rooftop solar system, there is minimal maintenance cost involved. The maintenance typically involves regular cleaning of the panels and ensuring no obstructions to the panels. The lifetime of a rooftop solar system is approximately 25 years.

A customer’s savings can be calculated using the following formula:

Electricity bill savings / year = (units generated / year) * (cost of power).

For example, a residential customer with a 3 kWp rooftop solar system and a residential power cost of Rs 5 / unit will save approximately Rs 21,600 per year.
(Also note that the power costs are continuously rising !)

Residential Solar – A Key Component of Smart Cities

The launch of Smart Cities Mission – under which the government plans to implement 100 smart cities and Atal Mission for Rejuvenation and Urban Transformation (AMRUT) – which is an urban rejuvenation programme for 500 towns, will trigger the process of urban transformation of India to enable better living.

Sustainable Environment is an important objective of both missions. Residential Rooftop Solar will act as an important agent in the urban transformation by harnessing the renewable energy source (solar) and reducing the emission of greenhouse gases such as COx, SOx and NOx.

Installing a 3 kWp solar system reduces the emission of COx (greenhouse gas) by 3700 kgs and is equivalent to planting 170 mature trees.


Adoption of Residential Solar is poised to grow significantly over the next few years – rising power costs and focus on sustainable development are enhancing the case.

It makes a good business case for Residential Buildings and Societies to go for Rooftop Solar. As the rooftop has zero opportunity cost it could be utilized to generate power and meet their electricity requirements – thereby using an idle asset.

In countries such as USA and Germany, solar plus storage solutions offerings have picked up significantly. Storage solutions (batteries) will play an important role in the adoption of residential solar in India.

New breakthroughs in Lithium-ion batteries and other battery technologies are enabling higher and more efficient energy storage. These batteries can be used to store solar energy generated from the rooftop – allowing for load shifting and providing back-up power – and in theory, enabling people to go entirely “off the grid.”

About Fourth Partner Energy (4PEL)

Fourth Partner Energy Pvt. Ltd. (4PEL) aims to build, develop and manage a large operating portfolio of de-centralized solar power assets in India and is positioned as a leading RESCO (Renewable Energy Services Company).

4PEL has completed over 400 solar installations across the country with several marquee clients. Customers range from a variety of industries such as educational institutions, corporates, hospitals, banks, industrial clients, and non-profit organizations.

Fourth Partner Energy (4PEL) started in 2010 with a focus on decentralised/ rooftop solar energy market. The company has a pan-India presence with offices in Hyderabad, Pune, Gurgaon, Chennai, Rajkot and Jaipur.

Web – Fourth Partner Energy

** Source: Bridge-to-India Report

Renewable Energy Services Company — November 5, 2015

Renewable Energy Services Company

Till date, most of the solar capacity in India is ground mounted and under policy based projects. The cumulative capacity of rooftop based projects in India is approximately 350 MW. However, this is likely to change as solar PV becomes cheaper and the prices of conventional power move up. We have already seen mass adoption of solar PV for rooftops in the US and Germany.

Increasingly, these installations are moving towards parity and away from the traditional feed-in-tariffs (FiT). India is very well positioned to move quite quickly as the parity based market. Factors such as frequent power cuts, increasing prices of conventional power, high irradiation and the falling costs of solar are music in the ears of the people looking to grasp the opportunity. The RESCO model will play an important part in the mass adoption of solar in India.

RESCO is a Renewable Energy Services Company (RESCO) which provides energy to the consumers from renewable energy sources, usually solar photovoltaic, wind power or micro hydro. The inherent business model of a Renewable Energy Service Company (RESCO) is different from that of a solar component manufacturer or a system integrator.

The Ministry of New and Renewable Energy (MNRE) has come up with a framework to capture the business model of a RESCO. A RESCO will typically set up the solar power project and then monetize the energy produced as compared to a system integrator, who would only install the project and be involved in the execution and implementation of the project for customer.

RESCOs are expected to operate on a model wherein they will partner with investors to own the asset (solar panels/collectors) using long term funds, generate power, distribute it and collect revenues from their customers.

In the RESCO model, the customer signs a Power Purchase Agreement (PPA) with the RESCO wherein the customer pays minimal upfront cost and only pays for the solar energy generated. This allows the customers to minimize their risk and allows them to adopt solar easily. Typically the PPAs are long term contracts.



The RESCO is a one stop institution for various energy related services through its role in interfacing with vendors, utilities and end consumers and playing the role of risk mitigator between them for effective end to end delivery of solutions and continuous after-sales-servicing.

RESCOs have been very successful in the expansion of rural electrification projects worldwide because:

• Low income rural households receive electricity without having to invest in renewable energy equipment, something that they would not normally be able to afford due to the high initial cost.
• Equipment is properly maintained and components replaced by the RESCO, making sure that the service is not interrupted,
• Equipment is owned by an organization that directly or indirectly represents the users (beneficiaries of the funding).

Fourth Partner Energy (4PEL) aims to build, develop and manage a large operating portfolio of de-centralized solar power assets in India and is positioned as a leading Renewable Energy Services Company (RESCO) with support in every part of the solar project: Financing, Engineering, Project Installation, Post-installation support.

We are an MNRE empanelled Channel Partner and an ISO 9001:2008 certified company. We are also registered as a partner with state bodies such as RREC (Rajasthan), TNREDC (Telangana) and NREDCAP (Andhra Pradesh)

For more details visit here: Fourth Partner Energy

Distributed Solar – Decentralization approach enhancing power dynamics in India — October 14, 2015

Distributed Solar – Decentralization approach enhancing power dynamics in India

Distributed Solar is an approach to meet the economic and environmental benefits including the management of growing energy demands.

Distributed Solar generation is opposite of centralized generation where the power is generated from locally available resources like biomass, wind or sun near to the point where it is being used. Since the power of the sun can be harnessed locally at a place one needs it, growing demands of power can be met in villages and small cities or town with less investment.

Below is a reference image of distributed solar power generation and distribution


The centralized approach becomes inefficient due to high investment cost and a huge transmission loss. Moreover, Power plants which use coals add heavy pollution in the environment. Distributed Solar on the other hand will eliminate the need for central solar operated by the large electric utility company. A small solar power plant can be owned by a qualified SME and this will help in local employment.

Decentralization approach will first feed the local loads and excess will be feed into the grid and thereby we will use the full generation capacity of power plant. A distributed approach also produces zero greenhouse gas emission which is the biggest advantage with it as it’s clean and pollution free.

India as a growing country having huge opportunities to generate clean local power through Distributed Solar Energy and initiatives has been already taken by the Indian government in the year 2010 with the name of “Jawaharlal Nehru National Solar Mission”.

The Jawaharlal Nehru National Solar Mission (also known as the National Solar Mission) is a major initiative by Indian government to promote solar energy. The objective of the National Solar Mission is to establish India a global leader in solar energy. The immediate aim of the Mission is to focus on setting up an enabling environment for solar technology penetration in the country both at a centralized and decentralized level.

Ministry of New and Renewable Energy (MNRE) has set up a yearly target of 100000 MW energy production through solar technology. To meet the scaled up a target of 100,000 MW, MNRE has proposed to achieve it through 40,000 MW through Rooftop Solar Projects and 60,000 MW through Large and Medium Scale solar projects.

Why distributed solar approach should be focused in India:

  • No Location Constraint: Solar photovoltaic technology is very clean and produces no noise, so it can be sited anywhere even in the locality.
  • Less land area used: Distributed solar approach can be established in the lesser land area if compared to centralized approach.
  • Cost Efficient: In 2003 the plan of India’s Ministry of Power to extend the grid power was abandoned because the investment that was required per house was 23,000 INR.
    But by the decentralized approach of distributed solar, mini-power plants can be set-up and the cost per house will be below 20,000 INR and most importantly energy will be free of cost.
  • Increased Employment: Distributed solar approach of 50 KW-300 KW opens the door for SME’s to invest in solar power generation and it will increase local employment.
  • Grid Stability: It helps in stabilizing the Grid. We can control on power reduction, control over voltage, low voltage ride through and overall we can insure lesser transmission losses

Apart from the above mentioned points, there are several other benefits of distributed solar. It is very difficult for a centralised power generation approach to supply power in rural areas. This is because stretching up the wires from the place where power is generated is very costly, tedious task, and unreliable. But if this centralized approach will be replaced by a decentralized solar power generation, then villages can have their own power plant, which seems most reliable and cost-effective as the energy need not be produced because it will come from solar renewable sources like sun and wind.

Distributed solar power generation approach will increase, the future of India and is going to be the crucial component of India’s energy. The infrastructure of distributed power generation is improving day-by-day. Even the government of India has encouraged the development in grid technologies, which support distributed power generation.




Considering the present scenario of sources of energy as shown in above figure there are huge scope in India to for renewable energy.

For more details please visit