Microgrids in India – Why Small is Big in Solar (Part 1)

In this first of a two-part series, Abhishek Gupta of Sunipod argues the benefits of solar microgrids in India.

Pressured from its increasing demand for electricity, India is staring at new energy realities, As supply from traditional power generation lags behind this demand, India must leapfrog to a tech investment cycle that captures the full benefits of the plentiful sunshine it enjoys.

Adopting an emerging alternative to traditional thinking will be critical to deliver expected growth. Microgrids, specifically distributed solar power generation, will have to be the default choice.

Here we introduce distributed solar PV power in the Indian context, lay out its advantages and discuss some of the challenges that India needs to overcome as a nation to revolutionize and forever change the way it looks at power.

We hope the information will help foster deeper discussions about microgrids in general, and distributed solar PV power generation in particular. Athough the discussion is in the Indian context, it is relevant to many other developing nations transitioning from a traditional electricity model to the one of the future.

For five years, since India started getting serious about solar power, the industry has primarily focused on large centralized power generation. We have tried to follow the established model of feeding electricity to state-owned utilities, generated from distant solar photovoltaic plants. This approach isn’t necessarily the best for India’s population, which is spread among distant rural communities.

Centralized solar produces substantial electricity that is fed into the grid and then supplied to customers by the transmission and distribution utility. These solar farms need grid infrastructure; electrical substations are required to step up the voltages to enable supply and then step it down to enable use. Also transmission and distribution network lines need to be run over long distances and difficult terrain, to get the clean solar power into the grid and to the end user. While all this is happening, laws of physics dictate that both voltage and power are lost as electricity travels long distances over resistive cables. These losses increase with time and are estimated to be up to 30 percent in India.

Distributed power is the opposite; its needs minimal infrastructure and results in negligible power losses. The end user often owns the solar power system, and directly receives its benefits. This is not possible with traditional resources of power generation. For example, it is impossible to imagine a coal plant with continuous water supply and turbines to generate power at every location where power is needed. Solar photovoltaic technology, however, easily lends us that possibility.

Logic dictates that rather than building centralized traditional fossil fuel powered plants, we get smarter, and create a distributed solar power generation system sited as close as possible to the users of the electricity.

Distributed solar PV has been around for decades as a niche solution. Techno-commercial feasibility has been achieved in more recent years. With an eye on surpassing grid parity distributed solar power generation is now poised to become an integral part of India’s energy transformation. As a nation India has a lot to look forward to from this technology, including:

Improved efficiency

As mentioned before, about 30 percent of India’s generated power is lost in transmission; in some places, losses are as high as 60 percent. Centralized solar plants use this inefficient grid system. Distributed PV, however, can be installed where power is needed directly, often within the campus or on the rooftops for security and minimal power losses.

Optimal use of space 

Centralized PV requires substantial land for development. In contrast, disributed solar is a no brainer, given the amount of unused roof space distributed. Schools, hospitals, universities, hotels, resorts, warehouses and other commercial and industrial complexes often have large open rooftops, where substantial solar power can be generated. Installing solar panels on open waterways, like the Gujarat canal experiment, reduces evaporation and generates power wherever water goes. This is just one example of ingenuity that solar PV affords and why it has a huge socio-economic benefit, especially in fast developing countries.

Blackout resilience

In 2001, virtually all of northern India experienced a 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 2012, a two-day blackout affected 700 million people in 20 of India’s states. The financial losses were too large to confidently calculate. A more recent event in the country’s financial capital, Mumbai, simple reminds us of the need for an alternative. 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.

Employment opportunity

As distributed solar systems become common, the industry will produce more jobs for installing maintaining, and servicing the systems. Already, for example, in the US solar energy related activities employ more people than in mining industry. As people start generating their own power, the savings will be channeled, into more job generation activities. Big and small businesses will need to employ local technicians, wherever they are needed. This is a big plus for quality and sustainable job creation.

Efficient fund distribution

Most large centralized solar plants thrive on preferential tariffs as part of the government mandate. They are effectively cost centers, causing incremental burden to loss laden utility companies in India. On the other hand distributed solar makes complete business sense. Even without any state help they provide electricity, at much lower levelized cost of energy. Any institution, that wishes to function efficiently over a long period of time, cannot ignore this fact. The state can continue its support in the form of continuing tax incentives, which are more effective way, of using public funds.

Low secondary costs

New transmission lines, maintaining large sub-stations must be factored into the cost of concentrating lots of solar megawatts in one place for downward distribution. All this has to be paid for and create returns.

Problems with the existing, inadequate and decaying electrical grid will need to be fixed, requiring huge investments. These investments could be channeled into spending on distributed solar plants. In fast developing countries there is an opportunity to use distributed generation, and build a new resilient and localized electricity system.