There Is Solar, And There Is Solar

There is solar, and there is solar. Centralized solar generation — large fields of solar panels feeding electricity into the grid — must be distinguished from distributed generation, that is, photovoltaics on rooftops. At the public policy level, the distinction between the two options matters, but this, unfortunately, receives insufficient attention.

The Hindu, January 19, 2015 quotes India’s Renewable Energy Minister Piyush Goyal: “India [is] committed to its … target of 100,000 MW solar power capacity by 2022…We are going ahead with our new renewable energy policy regardless of who will invest in it.” India also has an impressive training and employment program to coincide with the investment. However, the government has not yet indicated what proportion of this capacity will be used for distributed generation, but I expect that the majority will be grid-tied. That is, the sunlight converted to electricity will be fed into a loss- and theft-prone grid (nearly 20 percent is lost) before it reaches the customer — and grid-tied solar does not help rural electrification either. 

If this is the way we waste good electricity, I wonder why we should bother to produce solar power in the first place, if we plan to waste so much of it?

Consider the numbers in context. India’s electricity sector has an installed capacity at EOY 2014 of ~255 GW, of which ~2.6 GW, about 1 percent is solar. The addition of 100 GW solar is thus a significant commitment to renewables. The cost for this is estimated at “$100 billion a year for the next five years for production and $50 billion a year for transmission and distribution costs.”

All of this is good. I wish there was an explicit emphasis on “distributed generation” (DG) that is, rooftop solar. After all, India can also feasibly produce 100 GW of electricity by providing 100 million sites — schools, government offices, standalone homes, streetlights, water pumps — with solar-powered systems whose average capacity is ~1 kW. This alternative is democratic, encourages local enterprise, and reduces load on the existing grid. It is at least as green as, less wasteful than, and more labor-intensive than, the current approach. Small, standalone systems are also probably more robust and reliable. Large projects, in contrast, are prone to centralized control, and therefore the exchange of favors, that is, corruption.

Typologies matter. Not all photovoltaics are equivalent, though governments treat them as such when setting renewable deployment goals. Grid-tied, utility scale solar and large wind turbines located in remote areas or offshore are within the present industry fold. They do not threaten the business model of electric utilities.

On the other hand, rooftop photovoltaics with next generation batteries represent an exogenous and disruptive force from outside the walled-garden of electric utilities. 

While the grid will be with us for a long time, the momentum — optimum topology and economics — favor small distributed generation (DG) systems organized as a federation of microgrids.

“Solar” is thus not always an appropriate term for discussion and analysis. It is important to ask: Where is the solar deployed? Is it grid-tied or distributed? India consistently underemphasizes DG. The need for electricity, quickly, in all forms is significant, and perhaps this weighs in favor of MW scale projects.

A nagging suspicion remains: Are centralized grid-tied systems preferred because their budgets present opportunities for “consideration” in the creation and distribution of electricity?

Lead image: Transmission via Shutterstock

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Mahesh P. Bhave is Professor, NTPC School of Business (NSB), New Delhi area, He is also Founder, BHAVE Power Systems, San Diego, CA.  He teaches "Corporate Strategy - Energy-centric" and "Business Strategies for Microgrids" for MBA and executive MBA students. He works on projects to replace LPG (liquified petroleum gas) for cooking with solar and battery based solutions. Until December 2016, he was visiting professor, strategy, IIM Kozhikode, India.  Mahesh is an engineer from IIT Delhi with a Ph.D. from Syracuse University’s Maxwell School. He may be reached at . He is the author of  The Microgrid Revolution: Business Strategies for Next Generation Electricity , 2016, Praeger.  

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