Centralized Solar Energy Versus Captive Solar Power: Why Small is Big in Solar?

by Abhishek Gupta

Small is the New Big in SolarSmall is the New Big in Solar[/caption] The Indian solar electricity industry, thus far, has primarily focused on centralized, read Big, energy generation model, where large scale, private solar power systems, have become prevalent. We have tried to follow the established model, of providing solar power to consumers, transmitted from solar photovoltaic plants, located far away. This approach, isn’t necessarily the best for India, where a large part of the population is spread out, and has its own power and developmental needs. Education, and understanding of solar PV solutions, is necessary to make an informed decision, which is best for us. Let’s have a look.

Centralized solar, refers to large-scale solar plant installations, in usually remote locations. They are large solar power generation farms, producing substantial electricity, that is fed into the grid. Centralized solar farms need the same infrastructure; electrical substations are required, and transmission lines need to be run over long distances, to get that clean solar power, into the grid, and to the consumer. Laws of physics dictate, that efficiency and voltage are lost, when electricity has to travel long distances. The distributed captive solar energy model, is the opposite. Captive solar plants, refer to solar energy solutions, that produce energy on-site, or near-site; meaning, less or no voltage losses. A distributed solar solution, may be a photovoltaic system on a consumer’s rooftop or at a nearby location, powering the local point of consumption. The end user, often owns the solar power system, and directly receives the benefits of the system. These distributive solar energy systems, take care of the energy needs of the owner themselves. In essence, these are captive solar power plants. So, is it better to build centralized solar power plants, like traditional fossil fuel powered plants, or should we get smarter, and create a distributed solar power generation system, in which solar photovoltaic panels, are sited as close as possible, to the users of the electricity?

Distributed Captive Solar is Smarter Thinking

From a financial economics perspective, centralized solar farms are money earners for the investors, who sell the generated solar power; while captive solar plants, are investments made to reduce, and stabilize, electricity costs for the owners. Here are a few more considerations.

Captive Solar Plants are more Energy Efficient:

More than 30 percent of our electricity is lost in transmission in our current system, in some places, losses are as high as 60 percent due to theft, and distribution inefficiency. A centralized solar plant, is no different than the current system in this way. A captive system can supply power to where it is needed directly, often within the campus, or on the rooftops meaning better security and less losses.

Captive Solar Plants are more Space Efficient:

Most distributed captive solar plants, generate power, on or close to load sites, whereas a large centralized systems need development of new land, Given the amount of unused roof space self-power generation is a no brainer. Schools for example often have large open rooftops, that can generate substantial solar power, for their captive use. But it’s a leap, that status-quo content organizations, and individuals, are shy to make. Also consider, that installing solar panels on open waterways, like the Gujarat experiment, could reduce evaporation and generate power; wherever water goes ,so can solar power. Such solar ingenuity, has a huge social economic case, in developing nations like India.

Captive Solar Plants are more Space Efficient

Captive Solar Plants are Resilient to Grid Blackouts:

In 2001, virtually all of northern India was blacked out, after the failure of a substation, triggered the collapse of the country’s northern grid. Essential services, businesses, transport and essential supplies ground to a halt ,affecting 250 million people and causing 107.1 million dollars loss to business in just 12 hours. In the 2012 blackout for 2 days, affected 700 million people, in 20 states, in India. The financial losses, were too large to confidently calculate, and too severe to publish. The more distributed captive solar systems there are, the less impact such disasters can have. There will be no single points of failure that can bring down the whole grid, as there is with centralized power generation. The impact of intentionally created disasters, will also be minimized.

Captive Solar Plants are Resilient to Grid Blackouts

Captive Solar Plants are more Employment Friendly:

Imagine, when a solar power system, will become as common as a household appliance, like a toaster or microwave ovens. Though, we are not there yet, decentralized captive solar is the first step towards the future, where employment will be created to maintain, and service the long lasting solutions. As people start generating their own power, the savings will be channeled, into more job generation activities. Small and medium businesses, employing technicians to maintain and install systems, wherever they are needed, is a big plus point.

Captive Solar Plants are more Government Efficient:

Whereas, most large centralized solar plants, thrive on preferential tariffs, causing additional losses to already impoverished utility companies, distributed captive solar plants make absolute business sense; without any government help, by providing electricity, at much lower Levelized Cost of Energy. Any institution, that wishes to function over a long period of time, cannot ignore this fact. If however, the government must get involved, it could be in the form of continuing tax incentives, to captive solar plants, which are more effective way, of allocating public funds than big centralized projects.

Captive Solar Plants are more Government Efficient


Captive Solar Plants are more Secondary Costs Efficient:

The necessary costs for centralized solar power systems, like new transmission lines, large transformer stations must be calculated into the cost of concentrating lots of solar megawatts in one place. All this has to be paid for and returns must be expected. This, even from private enterprise, leaves the field open to collusion, between large players, and ultimately defeats the very goal, that renewable solar power, must be used to achieve. The problems with our current, inadequate and decaying electrical grid will need to be fixed, requiring huge investments, which are better channeled by spending on distributed captive solar plants. In India, there is an opportunity to use distributed captive solar plants, and build a new resilient and localized electricity system, to replace our inadequate and failing grid.

Solar Ingenuity has a Huge Socio-economic Case

Developing countries like India, must take this opportunity, for a sustainable revamping using solar power generation, for localized consumption. Centralized solar is a poor substandard alternative, to the best possible solution, and we need to shift focus, to distributed captive solar now, so that democratic electricity, is not just a pipe-dream, but a development fostering reality.


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Abhishek is a Solar Energy Patriot. At Sunipod he leads communication and awareness programs to help institutional adoption of solar power as a cost appropriate means to achieve business excellence and demonstrate social cognizance in India. For over 12 years he has helped developed new products and services and solutions for power industry helping Independent System Operators, generators and T&D companies to build practices to manage power and energy risks. He brings this expertise to foster institutional adoption of solar in India.He has a keen interest in incubating renewable solutions start-ups and promote entrepreneurial ventures supporting local communities. He has led various aspects of business development for start-up kpo/bpo projects by establishing alliances with leading companies in Market Research and Software Customization. Abhishek is a University of Michigan graduate. When he is not at Sunipod you can look for him in the mountains hiking, rock climbing or rafting. Look for his articles on blog.sunipod.com

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