I think BESCOM needs to do 3 things. Identify a list of all things that are needed to get itself ready to accept feed in. Make a recommendation on tarrif to KERC for its circle. Ask KERC to get ready to regulate & pass the relevant notification to kick start this. 

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BESCOM meeting

A meeting on solar rooftop was organized at BESCOM offices on 16^th October, Tuesday. It was attended by MD BESCOM and many BESCOM top officials, by MD KREDL and a GM from KREDL, representatives from groups such as CSTEP, SEMI (PV manufacturers association), manufacturers such as EMVEE solar and  EPC people such as EMVEE and Simplex, a rep from the British Commission, a rep from A Ravindra’s office, BPC member Pradeep K and myself.  Some of the citizen invitees on the list did not show up. (Raghu... I did not inform you... that was my bad... just slipped my mind).

Now, in my personal opinion, the outcome from the meeting was a bit disappointing.  I will not try to recap individual positions. The conclusions and learning in the meeting was the following.

1. BESCOM has already met its RPO (Renewable Power Obligation)
2. KREDL is not particularly inclined to this rooftop route, though MD KREDL expressed that rooftop is a good idea.
3. MD BESCOM wants to consider rooftop solar as a demand side measure and is targeting 10 MW installed in 6 months
4. However, BESCOM has no money to pay any incentive or high feed in tarriff for solar produced power given that it is not budgeted and considering the state of its finances. I agree with that.
5. Neither the state or center has any schemes currently, though there are some noises coming from the center (link).
6. BESCOM wants interconnection at 11 kV and not at 415 V LT.
7. A decision was made to sort of follow the Gujarat model and ask for aggregators to tender for providing 5MW of power each by renting rooftops.  However, these aggregators have to connect at 11 kV.  Gujarat allows interconnection at 415Volts.
8. Some 7-8 systems are already connected to the grid (supplying power for free).  They all had a tough time to connect since no clear procedures are defined.  There are few more people with some 200kW of power (estimated by me) wanting to connect!

Gujarat Story

It will be pertinent to go into what is happening in Gujarat before I make further points. In Gujarat, they started with a Gandhinagar Photovoltaic Rooftop Program.(Click to follow link).  In this program, the target was 5 MW.  They wanted about 80% from government buildings and 20% from individual households.  The idea was to have companies come forward and bid to install systems on rooftops.  Two vendors were selected through bidding to install 2.5MW each – Sun Edison and Azure Power.

The broad details of the program is that the vendors would get a certain rate for electricity (Feed in Tariff) for a period of 25 years and the rooftop owners were to get Rs 3 per unit of power generated by the system on their roof. Recently, GPCL has announced an intention to expand the scope to other cities for a capacity of 25 MW. See here.

The Gujarat Energy Regulatory Commission has considered solar energy in great detail.  Some relevant orders that make interesting reading are here, here and here (final order).

The tariff order passed by GERC on solar energy in 2012 can be found here.  Note that I will refer to this document below several times.  Would be good to have it open to follow the discussion. A more detailed discussion paper is also found here.

Looking at the relevant sections from the tariff order (See page 22)

1-6 kW is identified as rooftop and evacuation is at 230V single phase.

6-100 kW is for evacuation of power at 415V, three phase

100 kW – 1MW at 11kV, 3 phase.

Tariff applicability is the kilowatt scale tariff.

Now in order to determine the tariff, the following assumptions have been made:

Performance Assumption:

Capital cost:(panel plus mechanicals plus installation)  1.2 lakhs per kW 

O&M cost: 0.75% of capital cost

Escalation in O&M: 5.72% annually

Inverter replacement year: 13^th year (assumed inverter will go bad and has to be replaced)

Inverter cost during replacement 3.81% of capital cost

Capacity utilization factor: 18% annually

Performance Degradation: 1% annual

Aux consumption: 0.25% of energy generated

Useful life: 25 years

Financial parameters:

Debt: Equity ratio 70:30

Loan tenure: 10 years

Interest rate: 13%

Insurance cost: 0.35% annually

Interest on working capital: 1 months O&M expense + 1 month’s energycharges at normative CUF

Rate of depreciation: 6% pa for first 10 years and 2% pa for next 15

Minimum Alternate TAX rate: 20.008% pa for first 10 years

Corporate tax rate: 32.445% anually

Return on equity: 14% annually

Discount factor: 10.74% anually

From page 25 of the order,  Similarly, the levelized tariff including return on equity for kilowatt-scale solar photovoltaic power projects availing accelerated depreciation is calculated and finalized at ` 11.14 per kWh, while the tariff for similar projects not availing accelerated depreciation is calculated and finalized at ` 12.44 per kWh. The Commission has decided that there shall be a flat levelized tariff for 25 years for the kilowatt-scale photovoltaic power projects. Tariff is to decline 7% pa for subsequent two financial years.  Clearly the tariff order has not considered any rooftop incentive.  I am not sure of the tariff announced by the Gandhinagar program.  But if the Gandhinagar rooftop incentive has to be provided, an additional cost of Rs 3 should be added to the tariff.

What should BESCOM do - recommendation

Now BESCOM and KREDL want to go with an aggregator model (where a company installs on the rooftop and aggregates and supplies to the 11 kV line).However, they have no money to pay incentives and they are worried about the risks of installing such plants.  My concern is the following.

1. Clearly, from the Gujarat tariff order calculations which seem to be based on reasonable assumptions, it will not be viable to an operator without a higher tariff which has to come from some pot of money, presumably from the state government. which does not exist now.  Further, a 10MW target means a capex of 120 crores, which is not a small sum of money.
2. Secondly, for an aggregator to connect to 11 kV line, he needs to have a lot of rooftops collector together at 415V to add up to 100 kW at least and then he can think of step it up.  Otherwise, the cost of the smallest 11kV rated cable will itself kill him. They do not sell 11 kV cable of sub 10amp rating!
3. There was a lot of discussion surrounding the feasibility of connecting plants to 415V.  I am not too convinced with the arguments.  Gujarat allows LT interconnection and I have forwarded a document received by me from GERC (via email) to BESCOM..  Their tariff order also clearly allows LT interconnection.  Further, the world over people have been interconnecting at LT and feeding in.  There is an argument being made that grids outside India have a lot of instrumentation and automation at the LT level also while BESCOM has all its instrumentation at 11kV. I am not too convinced by that argument. I strongly feel this interconnection is possible at the low total powers of solar interconnection expected.  It will only be a problem when the percentage of solar connections grows to constitute say 10% of BESCOM consumption (just a number I have heard cited).  But this is a question answerable via proper analysis by experts.

Considering this reality, I propose that the aggregator model be abandoned and the following steps taken up:

1. Announce a program that lets individual rooftop owners to connect their PV systems to the grid.  Grid connected systems do not need batteries and will be much cheaper.  Without incentivized tariffs, there will not be a lot of applicants, but at least some people will want to connect.  Already there are people who want to!  The key is to make the process simple since the permissions process can add to costs for people installing (see this study looking at costs in US and Germany). German costs are low.
2. Figure out the 415 V issue. I am fairly confident interconnection would be possible safely without any grid stability issues at the scales that this will happen at for the time being
3. Determine  if BESCOM wants to offer net metering or FIT and at which rate. Get meters qualified for net metering / bi directional metering.  These are available in the market. Customers have to pay for the meters.
4. One of the attendees, Pradeep Konapoor also suggested that it would be great if there was a way to trade the REC (Renewable Energy Credits) for the power generated and pass the benefit to the consumers

Sit back and let those who want to interconnect do so. You will not get a flood of applications, but some enthusiasts will always connect. These become good pilot studies for you until either GoK or GOI put some incentives in place or for when PV prices crash further. Currently, given the incentives available and what BESCOM is willing to pay. knowing that their Renewable Power Obligations are met, and looking at the stance of KREDL, nothing more is possible in this policy environment. This is the story the numbers say. So why waste time calling tenders for the aggregator model and aim for a 10MW target.Let us get started somewhere.

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Its almost end of October. Has the meeting happened yet?

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...Was Running on Solar Power

That's right—half of all of Germany was powered by electricity generated by solar plants. That's incredible. It was also world record-breaking. Germany is pretty much singlehandedly proving that solar can be a major, reliable source of power—even in countries that aren't all that sunny.

Basically, anyone can buy solar panels, set them up, plug them into the grid, and get paid for it.

Source

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IDS, I am impressed you found this story :-)  I am not sure if people realize, but running your grid with a potential for 50% contribution from solar and WITH a mandatory feed in tarriff without the whole grid crashing is such an amazing engineering achievement.  This is the rosy side of the story.  There are impacts on their base load plants and other operators for this choice which probably will come in a different, engineering focussed story.  What is impressive is that Germany, thus far, has mostly stuck to their solar choice despite higher electricity prices as a result of the choice.

BTW, verno response from anybody to the questions I posed in the main post.  Anybody? Somebody?

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Sanjay, attempting some answers:

(1) Why should BESCOM support grid tied rooftop solar - in other words- what is in it for BESCOM? THe way Mr. manivannan framed it- which would be the best department in BESCOM to own this baby?

A new department, which will help BESCOM take part in Renewable Energy missions?

(2) If a target were to be set for grid connected capacity within a period of one year - what is a feasible number?  Who would be the most plausible customers? - Institutions? Apartments, communities, individual home owners?

500 Communities/Institutions, 5000 individual home owners? Can plan a "group purchase" for 6000 buyers?

(3) What should be the modality of buying power back from the consumer?  What feed in tarriff sholuld be offered - if that were to be the approach?

Start with simple "same cost" adjustments? 100 units taken, and 20 units fed back = bill for 80 units. On top of this, there could be annual subsidy, to cover the part cost of EMIs/loans used to purchase Solar equipment.

(4) How to popularize the concept and get implementers?

Awareness events to start with. A demo setup in 4 corners of Bangalore. A website with all details and clarifications on prices and benefits. Summarized 1-pagers that can be handed down along with the BESCOM bills.

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http://www.thehindu.com/news/states/karnataka/article3875240.ece

"The solar energy system that has been installed atop the BMRDA building has a 4.6 kilowatt grid-connected plant and 3 kilowatt of non-grid connected plant that has a battery for storage."

How did BMRDA get permission? I couldnt find more details on the solar installation - type of panel, inverter, certification. Will it be open to viewing by public? If any one has more information, please share.

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This ball seems to be finally rolling.  Let us start some discussions rolling.  Please post questions, thoughts comments from the point of view of BESCOM, technical expert, consumer etc.  A meeting will be planned in October.  The idea is to get some strong discussion going on the topic and identify key decisions to be made.

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India does not seem to be far behind - http://grist.org/list/india-flips-the-switch-on-worlds-largest-solar-power-plant/  Agreed that this is not on the lines of what is being discussed in this thread which is rooftop solar generation capability.

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Current situation

1) Difficult to get permission for grid-tie rooftop solar. Possible fine/disconnection otherwise.

2) Greedy metering. Benefit of rooftop solar is only as much as Im able to consume immediately. Rest is given free of cost to BESCOM.

Where we would like to be

1) Liberal outlook towards rooftop grid-tie solar.

2) Metering to account for all solar energy produced - either through FIT and/or netmetering.

As a start - Im in favour of netmetering for these reasons

1) The pricing is determined already. No complications. Though if solar power exceeds consumption, then Im not sure whats to be done.

2) FIT pricing might turn out to be contentious. How to determine FIT? Who determines FIT? If its too low, then not a good financial incentive to go for grid-tie solar. If its too high, then BESCOM might not be able to fund it and have to ask for Govt. subsidy. Once multiple Govt. agencies are involved, I believe the trouble goes up exponentially. Im also of the belief that technology should be viable on its own without subsidies.

3) High FIT might encourage a certain class of influential investors that will create trouble in the long term.

4) Minor point - 1 netmeter is cheaper than 2 greedy meters(?).

These are the questions I have for BESCOM/Manivannan

1) Whats are the hurdles for BESCOM - tariffs, techincal issues, HR, policy matters...?

2) Whats the simplest, fastest way to get past these hurdles?

3) How can we help?

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Here are some questions that came up in the discussion on facebook on this topic..  I have sumarized the questions below. Also have added a question of my own:

Policy / Model:

1. How to meet capital costs of solar system? Will BESCOM or Government provide subsidy?
2. Will BESCOM support in maintenance?
3. Focus on small or big customers?
4. Are there legal or procedural hurdles for BESCOM to procure power?
5. Request that any policy should consider existing solar systems to connect to grid
6. GM DSM BESCOM suggests an ESCO model with ESCOs tendering for power to BESCOM.
7. What is the buy back price for grid connected?

Technical Challenges

1. What are the technical challenges for BESCOM?
2. How to ensure quality of panels and other equipment for customers?
3. How to have enough contractors and ensure quality of contractors?

Customer Education

1. Customer education and empowerment?

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^ Excellent questions. What do you think will be favourable answers? If we need to push an agenda, be prepared to answer our own questions :)

One question from silkboard stood out

(1) Why should BESCOM support grid tied rooftop solar - in other words- what is in it for BESCOM?

Will BESCOM want rooftop gridtie solar to be financially positive for them right from the start?

OT : What is the rate of costliest power that BESCOM purchases? Why is it costly - time of day/year?

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Was looking at KREDL targets... 6600MW by 2014 & none of it from Solar. I am curious about this organization.. time for some digging.

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Sanjayv,

Thanks for the detailed summary of the meeting. Appreciate your efforts on this issue.

I agree 100% with you that it is time to facilitate feeding into the GRID with or without incentives. There will only be gains by this facilitation. At least can start with putting Solar Panels on govt buildings (Both State and Central govts.) and feeding into the grid. May be Government Order (GO) for mandatory rooftop panels in next 5 years on all govt building with certain floor area. This should also extend to all the new developments (Residential & Commercial).

Time to rope in corporates to sponsor some installations on Govt. buildings?

-Syed

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Sanjay,

Do we really need incentives to setup roof top solar PV system? Take my example. I pay around Rs1200 to Rs1400 electricity bill every month out of which close to Rs 400 to Rs 500 are in the highest slab. Even if i were to install a 1KW inverter with 200 to 300 W solar panel system i save a lot. I am getting max buck for my investment.

Why install a system to convert most of the grid power to solar energy and pay huge capital investment? With the above approach i am getting close to Rs 4.50 per unit.

Along with the above approach what is needed from KREDL/BESCOM is to faciliate the REC for roof top solar PV owners. If we can push them to faciliate this Roof Top Solar PV can be a worth while and will go a long way.

By the above approach the question of grid instability/issues are also eliminated. Any comments/thoughts on this?

Thanks

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Im in general agreement with RamSolar - no incentives, just net metering. I still dont understand whats stopping BESCOM!

One apparent downside (upside IMO) is that it make cross-subsidising difficult. People will install just enough solar panels to not be in the highest slab, since this makes the most economic sense. At lower slabs, grid electricity is than solar.

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Sanjay, and CitizenMatters - thanks for a nice summary of currrent status of Solar tooftop based grid/byuback initiatives on this article at CM:

BESCOM Solar rooftop initiative:

BESCOM now plans to ensure 10 Mega Watts of solar-rooftop this year, with net-metering. Solar power can be fed into the grid at 415 Volts. But, there will a cap on the quantity of power that can be injected. It shall not be more than 10% of the network capacity at 415 Volts. BESCOM has formed a steering team that includes members of the public too. It has sent a draft cabinet note to government on solar-roof top policy.

We should push this more. Thanks again to you Sanjay for your advocacy efforts with BESCOM here.

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The meeting at BESCOM might have been initiated probably after the directive from karnataka power ministry regarding obligatory purchase of 0.25% of Power through Renewable source (SOLAR) by all the DISCOMS starting in 2013.  

As per the MNRE Directive to all the states, it is mandetory to purchase solar power by DISCOMS at a minimum of 0.25% between 2013 and 2015.  the purchase obligation will increase to 0.5 % (or more) after 2015 until 2020.  

This does not include the other renewable sources (wind, biomass etc) for which the obligatory percentage is higher.  this obligation is already being fulfilled by most of the states and solar is seperate obligation which cannot be combined.  So if BESCOM says they are already fulfilling the renewable source obligation, they mean the other sources and not Solar.

Centre has provided an alternative if the DISCOMS cannot purchase the required quantity of solar power,. They need to purchase RECs (Renewable energy Certificates) from one of the two power exchanges setup trading RECs.  

The RECs are generated by Solar power producers anywhere in india who are getting nominal tarrif (much less than normal PPA) and RECs (one REC for 1MWH) and providing power to national grid

The Solar RECs have a base price of Rs.9000.00 (or Rs.9 per unit kwh) and based on the demand from the DISCOMS, can go upto 13000.00 (Rs.13 per unit)

So Mr. Manivannan is a smart man.  he is choosing to make effort to promote grid connected solar power and somehow meet the obligation instead of  purchase RECs at higher price.  

In this context, it is in the interest of BESCOM to provide one time capital subsidy to promote solar installation and purchase power at normal rate.

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BESCOM already meets its RPO target.  This year for example, we have had massive amounts of wind generation during monsoon.

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While appreciating the PPP model of PVC panel power generation to be fed into the grid, those who are really interested in doing something towards reducing dependency on diminishing natural resources are flummoxed by the various technicalities like grid capacity, difficulties in coordinating with and licensing of individual rooftop PVC panel holders, etc. Make it simple for people and they will be happy to get involved. These are not insurmountable difficulties and with the available expertise within the BESCOM rank and file, it should be possible to rope-in power generation hardware suppliers and help people blend with the system without too many hassles. Authorities must propogate this novel idea as a global ecological and environmental issue and create awareness to atract more and more people towards this renewable energy module for energy self-sufficiency. Outsourced agencies must be lured with volume creation for their products through State's intervention. Meanwhile, regulation of misuse of power during day time for lighting purpose in Government offices/banks/MNCs etc., must be on top of the agenda of BESCOM; please browse http://sunlightexpertvasanth.carbonmade.com for simple solutions for harvesting sunlight for lighting interiors.

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