The Ultimate Solar Power Plant Solution for Industries

The Rising Demand for Solar Power Plant Solutions for Industries

In India, the industrial solar power plant has grown in popularity, with major industries turning to solar power to avoid grid outages. Most major sectors, such as Textile, cement, paper, steel, chemical, dairy, and ceramic industries, are rapidly adopting industrial solar power plants to reduce their energy costs, thanks to the availability of open access in most states. According to Wikipedia, rooftop solar power accounts for 2.1 GW, with 70% of it being industrial or commercial. India is developing off-grid solar power for local energy needs in addition to its large-scale grid-connected solar photovoltaic (PV) initiatives.

How India’s Solar Energy Demand Has Rapidly Increased

The government recognised this potential as early as 2010 and has taken steps to ensure steady growth in the segment. As a result, the solar industry has achieved significant economies of scale in a short period, rendering India the cheapest solar power producer. In 2010, the total installed solar capacity was a mere 10 MW. By 2016, it had skyrocketed to 6000 MW, representing a 600-fold increase in just six years. By March 2019, the total installed solar capacity hit 30 GW, a rise of five times in just three years. Solar has now achieved over 30% of the goal of 100 GW by 2022, accounting for 38% of the renewable energy mix.

Government reaches out to solar developers.

These figures demonstrate the government’s focused approach and the encouraging response from solar developers. Today, users of solar power for industries in India can enjoy greater energy security by locking in the cost of solar energy for 25 years, thus diversifying against volatile grid electricity prices linked to fossil fuels.
Data Source: economictimes.indiatimes.com

State Government Policies for Industrial Solar Development

Frameworks Encouraging Solar Adoption

The rapid development of the solar industry is strongly supported by State Governments. Since electricity is a state subject, stable policies are necessary for rapid adoption. States like Karnataka and Tamil Nadu lead by example, encouraging open access to solar by providing discounted wheeling and banking services. As a result, both states now boast some of the highest solar power generation capacities in the country. Many other states have recently adopted similar policy frameworks to accelerate adoption in commercial and industrial sectors. Renewable Purchase Obligations (RPOs) mandate that state discoms and large power users purchase power from “green” sources or purchase “renewable energy certificates (RECs).” While these RPOs helped increase demand for solar energy, their inconsistent implementation limited their desired effect.

Key Advantages of a Solar System for Industries in India

When power consumption is high, electricity bills from discoms are significantly higher. An industrial solar power plant is a highly efficient solution to reduce this electricity bill. Industries have the flexibility to choose between two primary solar business models: CAPEX and OPEX.

CAPEX Model: The consumer makes an upfront investment.
OPEX/RESCO Model: The consumer pays for the energy consumed with no upfront investment (also called the zero-investment solar model).

Consumers can also opt for an EMI option in the CAPEX model, requiring only 30% equity, with the rest arranged by banks or NBFCs. Beyond these models, numerous advantages entice businesses to invest in a solar power plant solution for industries:

Substantial Reduction in Electricity Costs
Dependable New Power Source from renewable energy.
Boost the Importance of Energy Efficiency within operations.
Minimal CO2 Emissions, enhancing sustainability and helping meet climate goals.
Easy to Monitor ROI with low maintenance costs.
Electricity Self-Consumption ensures energy independence.
Improved Brand Reputation due to reliable power with few service interruptions.

Why the Industrial Sector is Switching to Solar Power in 2024

In India, electricity users are divided into three categories: commercial, industrial, and residential. Industrial consumption accounts for approximately 48.6% of total electricity generated, making it the most critical sector in terms of demand. Industrial grid tariffs can be as high as INR 8 per unit during non-peak hours and even higher during peak hours. The main variable cost for power-intensive industries is related to heavy usage during peak times. Consequently, commercial and industrial solar power is the best way to reduce the grid’s maximum load and avoid high tariff rates.

Solar is an ideal energy solution for industries

Solar is an ideal energy solution for industries due to high peak sun hours aligning with operational hours and large available rooftop or land area. The ability to demonstrate an increased share of renewables and achieve RPOs (Renewable Purchase Obligations) is another key motivator. Furthermore, companies with captive industrial solar power systems may avail of tax breaks, accelerated depreciation, capital subsidies, and other incentives.

Choosing the Right Solar Business Model for Your Industry

As mentioned, industries have two main options for installation: CAPEX or OPEX.
Due to large-scale consumption, many investors are willing to fund companies under the zero-investment (OPEX) solar power plant model. Loofal Protech Solution works with both types of solar business models.

If your business’s electricity load consumption is above 500KW, you are likely eligible for a zero-investment solar power plant.
If it is less than 500KW, you can still save significantly by setting up a CAPEX model solar power plant.

Understanding the Cost of an Industrial Solar Power Plant in 2024

Setting up a solar power plant solution for industries requires a significant initial investment but is an extremely successful and profitable solution for any industry. The approximate cost to build a 1MW solar power plant is about Rs. 4 crores. This net cost includes solar panels, inverters, wiring, cabling, earthing, lightning arrestors, switchyards, and other balance of system components. The long-term savings and rapid ROI make it a wise financial decision. For the latest benchmark costs, you can refer to reports from the Central Electricity Authority (CEA).

Ready to Explore Your Solar Power Plant Solution?

Do you want to set up a solar power plant for your company or factory? If you are looking for a comprehensive solar power plant solution for industries that maximizes your revenue and savings, we have the best solution for you.

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