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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

NICMAR
FINANCIAL FEASIBILITY OF SOLAR POWER PROJECT
WITH REFERENCE TO RURAL ELECTRIFICATION OF 39
TALUKAS IN KARNATAKA

By
Gunjan Nayak P41021
J. Mohamed Ibrahim P41031
Shreyas V. Bhatt P41053

PGP PEM 4th Batch


(2008- 2010)

Under the guidance of


Prof. Vivek Date
A Thesis submitted in partial fulfilment of the Academic requirements for the
Post Graduate Programme in Project Engineering and Management
(PGP PEM)

NATIONAL INSTITUTE OF CONSTRUCTION


MANAGEMENT AND RESEARCH
PUNE
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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

DECLARATION

I/We declare that the research thesis entitled Financial feasibility of solar power project
with reference to rural electrification of 39 talukas in Karnataka is bonafide work carried out
by me/us, under the guidance of Prof. Vivek Date. Further we declare that this has not
previously formed the basis of award of any degree, diploma, associate-ship or other similar
degrees or diplomas, and has not been submitted anywhere else.

Mr. Gunjan Nayak


(Roll No. P41021)

Mr. J. Mohamed Ibrahim


(Roll No. P41031)

Mr. Shreyas V. Bhatt


(Roll No. P41053)
PGP PEM 4th Batch (2008-2010)
NICMAR, Pune.

Date:
Place:

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

CERTIFICATE

This is to certify that the research thesis entitled Financial feasibility of solar power project
with reference to rural electrification of 39 talukas in Karnataka is bonafide work of Mr
Gunjan Nayak (P41021), Mr. J. Mohamed Ibrahim (P41031) and Mr. Shreyas V. Bhatt (P41053)
in partial fulfilment of the academic requirements for the award of Post Graduate Programme in
Project Engineering and Management (PGP PEM). This work is carried out by him/them, under
my guidance and supervision.

Guide

Prof. Vivek Date

Counter Signed by:

Prof. P. M. Deshpande
Head, PEM

Date:
Place:

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

ACKNOWLEDGEMENT
We express our honest gratitude towards respected Director General, Dr. M. G. Koregaonkar,
NICMAR, for providing the platform of conducting the thesis work as a part of the curriculum.

We would like to express our deepest and sincere gratitude to our Project Guide Prof. Vivek
Date for his continuous guidance, cooperation and motivation which helped us to comprehend
this thesis work in better ways. He has been eternal source of inspiration and knowledge.

We hereby take the opportunity to thank Dy. Dean, Prof. Vivek Datey and Head PGP PEM,
Prof. Pramod Deshpande for giving their consent to carry our research work and providing all
that was essentially needed.

We also take the opportunity to thank our librarian Mr. Jadhav, for extending his support to
complete the thesis.

We would like to take the opportunity to thank the whole staff of NICMAR, Pune who have
made this endeavour a modest success and also provided us with all the facilities throughout the
programme.

We appreciate the support and help rendered in presentation of this thesis by all our friends and
all those who have directly or indirectly contributed in making this thesis work a success. We
would like to dedicate this thesis work to all these people for their unending support.

Gunjan Nayak
J. Mohamed Ibrahim
Shreyas V. Bhatt

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

Executive Summary
Objective:
To evaluate the financial feasibility of the solar power project with reference to rural
electrification of 39 talukas in Karnataka.
Energy is an important input for economic development. Since exhaustible energy
sources in the country are limited, there is an urgent need to focus attention on development of
renewable energy sources and use of energy efficient technologies. The exploitation and
development of various forms of energy and making energy available at affordable rates is one
of Indias major thrust areas. The country is blessed with various sources of non-conventional
energy and the efforts of Ministry of Non-Conventional Energy Sources will promote viable
technologies that can reach the benefits of such sources to the poorest people in the far-flung
regions of the country.
India lies in the sunny regions of the world. Most parts of India receive 47 kWh (kilowatt-hour)
of solar radiation per square meter per day with 250300 sunny days in a year. The highest annual
radiation energy is received in western Rajasthan while the north-eastern region of the country receives
the lowest annual radiation. Solar energy, experienced by us as heat and light, can be used through two
routes the thermal route uses the heat for water heating, cooking, drying, water purification, power
generation, and other applications; the photovoltaic route converts the light in solar energy into electricity,
which can then be used for a number of purposes such as lighting, pumping, communications, and power
supply in un electrified areas. Energy from the sun has many features, which make it an attractive and
sustainable option: global distribution, pollution free nature, and the virtually inexhaustible supply.
Financial analysis seeks to ascertain whether the proposed project will be financially viable in the
sense of being able to meet the burden of servicing debt and whether the proposed project will satisfy the
return expectations of those who provide the capital. The viability parameters considered are equity IRR,
DSC, NPV and payback period.
The project under consideration for this thesis is Rural electrification of 39 Talukas in Karnataka
using solar power. The approach that we have adopted to evaluate the financial feasibility is as follows:

Technical Analysis in order to estimate the load requirements of the project.


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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

Cost of the project


Means of Finance
Depreciation
Interest calculation
Revenue Generated
Project Cash flows
Scenario & Sensitivity analysis

Considering the tariff of Rs.15 per unit, the following viability parameters of the project are generated.

Equity IRR
NPV
DSCR
Payback period

- 18.08%,
- Rs.3.56 Crore,
- 2.05,
- 6 years

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

CONTENTS
Declaration...........................................................................................

II

Certificate..............................................................................................

III

Acknowledgement.................................................................................

IV

Executive Summary................................................................................

Content....................................................................................................

VII

List of Figures.........................................................................................

List of Tables..........................................................................................

XI

Bibliography...........................................................................................

XII

Chapter - 1

Introduction..................................................................1 - 6

1.1

Introduction

1.2

Renewable Energy

1.3

Solar The centre stage of renewable energy

1.4

BIPV The Future of solar energy

1.5

Key Factors of the project

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

Chapter 2

Renewable Energy.......................................................7 - 14

2.1

Renewable Energy

2.2

Types of renewable energy

11

Chapter 3

Solar energy.................................................................15 -27

3.1

Solar The centre stage of renewable energy

16

3.2

Advantages of Solar energy

17

3.3

Solar Photovoltaic

18

3.4

Standards of SPV

21

3.5

Advantage of SPV system

21

3.6

SPV Lighting system

22

3.7

SPV Power plant

23

3.8

Solar Generators

24

3.9

BIPV Integrated PV system

25

3.10 SPV Pumping system

25

3.11 Solar Power in India

26

Chapter 4

Building Integrated Photovoltaic system (BIPV).....28 - 50

4.1

BIPV Introduction

29

4.2

Types of BIPV System

30

4.3

Market Segmentation of BIPV system

33

4.4

Global & Indian Scenario

34

4.5

Technical Analysis

36

4.6

Components of BIPV system

40

4.7

Positioning of Panels

46
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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

Chapter 5

Project Details.............................................................51 - 61

5.1

Objective

52

5.2

Introduction

52

5.3

Remote village electrification programme

52

5.4

Guidelines for preparation of proposal

54

5.5

Financial assistance guidelines

58

5.6

Monitoring

59

5.7

General terms & conditions

60

5.8

Relevant extract from the National Rural Electrification Policies

61

Chapter 6

Financial Appraisals

6.1

Objective

63

6.2

Financial Appraisal of the Project

63

Chapter 7 Concluding Observation.......................................................71 - 74


7.1

Social desirability of the project

72

7.2

Technical feasibility of the project

72

7.3

Financial aspects of the project

73

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

LIST OF FIGURES
Sr. No.

Title of the Figure

Page No.

3.1

SPV Technology

19

3.2

SPV Modules

21

3.3

Solar street light

23

3.4

SPV Power Plant

24

3.5

SPV Pumping system

27

3.6

Solar radiation in India

28

4.1

Flat rooftop

32

4.2

Sloped rooftop

32

4.3

Faade mounting

33

4.4

Process of PV lamination

42

4.5

Types of PV modules

43

4.6

Series and parallel connection of solar batteries

46

4.7

Charge controllers

46

4.8

Ideal positioning of the solar panels

49

4.9

Movement of sun during the seasons

50

4.10

Solar panel calculator

51

4.11

Solar zenith angle

52

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

LIST OF TABLES
Sr. No.

Title of Table

Page No.

2.1

Sector wise Energy consumption in India

10

2.2

Significance of renewable energy

10

2.3

Renewable energy- estimated potential and cumulative achievements

12

4.1

Country wise comparison of BIPV systems

36

4.2

Calculation of per year consumption with listed equipments

39

4.3

Efficiencies of various cells and modules

43

4.4

Lowest prices of various PV modules

44

4.5

List of BIPV suppliers in India

48

6.1

Cost of the Project

64

6.2

Means of Finance

66

6.3

Analysis

69

6.4

Scenario analysis

69

6.5

Sensitivity analysis

70

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

CHAPTER 1

INTRODUCTION

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

CHAPTER 1
1.1

Introduction
The Sun is a reliable, non-polluting and inexhaustible source of energy. Since the

beginning of life on earth, the energy that was received by all living forms was radiated from the
sun. It is the time now when the mankind is on a standpoint to again depend and rely upon the
sun as the main source of energy.
With rapid rise in energy prices, concern over pollution, depletion of resources and
environment degradation the awareness for limited resources around the world has increased
dramatically. Use of fossil fuels which causes green house emissions, inefficient use of energy
and release of harmful pollutants to the atmosphere causing threat such as acid rain must be
addressed seriously in new buildings. Governments with vision have come to realise that
generation of electrical power through non renewable sources of energy is not enough. The
power of the future must be environmentally friendly as well.
Photovoltaic is a way by which energy from the sun can be directly used for power
generation. This method for electricity generation causes no environmental pollution, has no
rotating or moving parts, and causes no material depletion. Photovoltaics are also
multifunctional. It can generate and operate illuminations, pump water, operate any house hold
equipments and appliances, can operate any electrical gadgets and communication equipment.
The photovoltaic finds its wide application in village electrification in the developing countries
and electricity production for the buildings, commercial areas and industrial sector in cities.
BIPV, a segment of the growing Photovoltaic (PV) market, is becoming a popular way to
generate electricity by the use of solar energy. Building integrated photovoltaic (BIPV) projects
uses nearly 50% of world production of solar PV cells. However, we in India are yet to initiate
the promotion of BIPV. A Building Integrated Photovoltaic (BIPV) system consists of
integrating photovoltaic modules into the building envelope, such as the faade or the roof.
In this thesis we would be evaluating the financial feasibility of the Electrification of 39 talukas
in Karnataka using Building Integrated Photovoltaic technology.
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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

1.2

Renewable Energy
In modern world the demand for energy has increased dramatically in the past century

and it will grow even further in the near future than ever before.
Renewable energy is that energy which comes from the natural energy flows on earth.
Unlike conventional forms of energy, renewable energy will not get exhausted. Renewable
energy is also termed as green energy, clean energy, sustainable energy and alternative
energy.
Different types of renewable energy are:

1.3

Solar energy

Wind energy

Biomass energy

Hydropower

Geothermal

Solar- The centre stage of renewable energy:


The radiant heat and light energy from the Sun is called as solar energy. This is the most

readily and abundantly available source of energy. Since ancient times this energy has been
harnessed by humans using a range of innovations and ever-evolving technologies.
The earth receives more energy in just one hour from the sun than what is consumed in
the whole world for one year. This energy comes from within the sun itself through process
called nuclear fusion reaction. In this reaction four atoms of hydrogen combine to form one
helium atom with loss of matter. This matter is emitted as radiant energy.
India is a tropical country with sunshine in plenty and long days. About 301 clear sunny
days are available in a year. Theoretically, India receives solar power of about 5000 trillion
kWh/yr (600 TW approx.) on its land area. On an average, daily solar energy incident over India
ranges from 4 to 7 kWh/m2. Depending on the location sunshine hours varies from 2,3003,200
hours in a year. This is far more than current total energy consumption. For instance, assuming
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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

conversion efficiency of 10% for PV modules, it will still be thousand times greater than the
likely electricity demand in India by the year 2015.
This energy from the sun is used as solar thermal and solar power applications. Solar
thermal energy, through various technologies, is utilised for various purposes which includes
Heating, Drying, Cooking, seasoning of timber, water treatment (Distillation and disinfection),
Cooling (Refrigeration and Cold storage), High temperature process heat for industrial purposes.

1.4

BIPV- The future of solar energy


Solar energy is not only about present but it also about future. The unlimited potential of

Solar is visible in its varied applications of energy generation. One such power of solar can be
seen today with homes being energised by solar panels. This energy accelerates cost saving as
electricity bill is reduced to about 30% with incorporation of solar power.
Buildings are the largest consumers of electricity using over 40% of the world electricity.
The developers, consultants, architects, investors and contractors are opting for alternative forms
of energy without damaging the environment as we incline towards passive energy buildings.
Solar technology in form of solar Photovoltaic is a proving to be a reliable solution for electricity
generation.
Photovoltaic literally stands for 'electricity from light'. A photovoltaic cell, also called as
PV cell, is a special semiconductor diode that converts visible light into DC (direct current).
Certain PV cells are able to transform infrared (IR) or ultraviolet (UV) rays into DC power. Solar
powered toys, calculators and telephone call boxes are some common application of solar
electricity. Photovoltaic cell forms an integral part of solar-electric energy systems, which
presently are finding increasingly important place as an alternative utility power source.
The PV technology in use today is not very complex. Photovoltaic cell comprises of thin
layers (two or more) of semi-conducting material, usually silicon. When this silicon is exposed to
light it generates electrical charges and with the use of metal contacts this can be conducted away
as direct current (DC). A single cell has small electrical output, so multiple cells are combined
together and encapsulated to form a PV module (also called "panel"). This module is the
principle and basic building block of entire PV system and numerous modules can be put
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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

together to give the desired electrical output. Contemporary PV cells are able to convert 10 to 20
percent of radiant energy into electrical energy. In years to come, this efficiency will be
improved to produce even better results.
The different types of PV systems are multi-crystalline Silicon Cells, Mono-crystalline
Silicon Cells, Amorphous Silicon, Thick-Film Silicon, Other Thin films. Today the grid connect
PV systems are the main area of interest. As these systems are connected to the local electricity
network, the electricity produced during the day time can either be used immediately or can be
sold to the utility. Also as the sun goes down, power can be bought back from the network. Thus
the grid is acting as system for energy storage, i.e. the battery storage need not be included in the
PV systems. Stand-alone photovoltaic systems are used where grid power supplies are difficult to
connect or unavailable. Applications are in monitoring stations, radio repeater stations and street
lighting.
PV technology is most widely used in the developing world. The system finds itself the
best place where the problems of remote locations and fact of unreliable or non-existent
electricity grids are dominant. Here, PV power supply serves as the most economic option.
Building Integrated Photovoltaic (BIPV) is a multifunctional solar product that not only
generates electricity but also serve as materials for construction. Building Integrated Photovoltaic
is where the building envelope is incorporated with PV cells instead of conventional materials of
construction. BIPV gives buildings the opportunity to become more self-sufficient by allowing
them to generate their own electricity rather than merely consume energy. PV integrated into a
building can, as a second function, also provide shade, insulation and help to control the interior
climate.

1.5

Key factors of the Project

Key Factors in project concept note regarding the electrification of 39 talukas in Karnataka
using BIPV Technology.
The government of Karnataka desires to implement the application of solar technology to
provide rural energy solutions.

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

The Solar system application to be implemented in identified cluster villages of the 39


most backward Talukas of the state.

Target is to cover villages with minimum of 100 households and above and to cover a
minimum of 100 village clusters.

Solar Technology applications to be implemented in a comprehensive manner for


solutions in following areas.
i. Domestic Home Lighting
ii. Street lights in village/panchayats limits
iii. Shops in village
iv. School in village
v. Flour mill
vi. Clinic
vii. Irrigation of agricultural land in the village

The solar technology to be inconformity with MNRE GOI, standards/ specifications.

The technology provider to indicate the rate at which Kwh or unit of power can be made
available.

The Solar technology providers to identify cluster of villages/where in they can execute
and may come out with RFQs on annuity basis; while taking full responsibility of
installation, maintenance and reliable functioning of the technology provided by them on
a sustainable basis.

KREDL/ RDPR respective Zilla Panchayats (Taluk Panchayats / Grampanchayats ) and


respective implementation departments in district level will work in close coordination.

Depreciation to be considered is 80% of the total capital cost of the project.

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

CHAPTER 2

RENEWABLE ENERGY

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

CHAPTER 2
2.1

Renewable energy

2.1.1

Need of Renewable Energy:


The various activities (such as industrialization) which involve energy consumption that

consequently leads to depletion of energy sources and degradation of environment are stretching
the resources of our planet to breaking point. When it comes to the future of energy, the world
needs a reality check.
The economic growth and prosperity of any country or region in the world is related to
the level of its consumption of energy. With the various developments, particularly with the
Industrial Revolution, there has been a quantum leap towards the tremendous consumption
energy which is supplied through fossil fuels such as gas, petroleum and coal.
During 1920s, coal accounted for the maximum part of total energy supply of the world.
Later in early 1990s, its share dropped to only 26%, while 40% of the worlds energy needs was
taken by oil. Now the depletion rate of fossil fuels has reached to 100,000 times faster than its
formation rate.
When the resource under consideration is non-renewable energy source, the problem of
depletion is an obvious addition to its consumption. At present, non-renewable fossil fuels
(natural gas, coal and petroleum) contribute to 90% of world commercial energy production. The
remaining 10% generated from non-conventional form of energy (nuclear, hydropower,
geothermal, wind, solar, etc.). Even if the present reserves of fossil fuels may be sufficient
enough to meet the global energy demand for years in future, any consumption of such resources
represents an absolute loss in its finite supply.
Projections on the energy demand in the early years of 21st century are alarming. The
estimates are about100 million tonnes per year for petroleum, 400 million tonnes per year for
coal and 100,000 MW per year for power.
This energy scenario poses a great challenge for our technology, and also to our environment,
which is suffering a tremendous pressure.
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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

Sector

Percentage power consumption

Industry

49%

Transport

22%

Residential

10%

Agriculture

5%

Others

14%

Table 2.1: Sector wise Energy consumption in India


The present total installed capacity of electrical power generation in India is 1, 44,912 MW (as
on June 2008), produced from various resources as given in table

Resources

Production

Percentage Share

76648

52.8

14716

10

1119

0.8

Total = 92563

Total = 63.6

Nuclear

4120

2.8

Hydro

36033

24.8

12194

8.4

144910

100

Thermal
Coal
Gas
Diesel

Renewable energy sources


(Excluding hydro)
Total

Table2.2: Significance of renewable energy

In modern world the demand for energy has increased dramatically in the past century and it will
grow even further in the near future than ever before.
Renewable energy is that energy which comes from the natural energy flows on earth.
Unlike conventional forms of energy, renewable energy will not get exhausted. Renewable
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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

energy is also termed as green energy, clean energy, sustainable energy and alternative
energy.
Merits:

Renewable energy sources are available in nature free of cost

They produce no or very little pollution

They are inexhaustible

They have low gestation period

Demerits

In general , the energy is available in dilute form from these sources

Though available freely in nature, the cost of harnessing energy from non-conventional
source is generally high

Availability is uncertain; the energy flow depends on various natural phenomena beyond
human control

Difficulty in transporting such forms of energy

Located in tropical region, India is endowed with abundant renewable energy resources i.e.
solar, wind and biomass including agriculture residue which are perennial in nature. Harnessing
these resources is best suited to meet the energy requirement in rural areas in a decentralised
manner.
India has the potential of generating more than 100000 MW from non-conventional
resources. Up to June 30 2008, the electrical power generation by conventional resources has
reached 12,194 MW, which is about 8.4% of total installed electrical power generation capacity.
The government plans to increase this share to 10% by 2012. The current status of various
resources is given in table.

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

SL No.

Source/System

Estimated Potential

Cumulative achievement

Rural & Decentralised Energy systems


1

Family type biogas plant

120 lakhs

39.40 lakhs

Solar photovoltaic program

50 MW/sq.Km

110 MWp (p-peak)

Solar street lighting system

69,849 nos.

Home lighting system

363399 nos.

Solar lantern

585001 nos.

Solar power plants

2.28 MWp

Solar thermal program

140

Solar water heating system

collector area

million

sq.m 2.15 million sq.m collector

Solar cooker

area
6.17 lakhs

Wind pumps

1284 nos.

Aero generator/hybrid system

Solar photovoltaic pump

7068 nos.

Remote village electrification

3368/830 villages/hamlets

675.27 KW

Table2.3: Renewable energy-estimated potential and cumulative achievements (Dec, 2007 data)

2.2

Types of renewable energy:

2.2.1 Solar energy


This is the energy that we receive from sun. This energy is converted into heat and
electricity. The photovoltaic sector has reached manufacturing output of about 6,850 MW per
year in 2008 (according to SEIA-solar energy industries association). Germany is the largest
market for PV in the world. Solar thermal power stations are dominant in the Spain and the USA.
The largest power station is in the Mojave Desert (354 MW SEGS).
India receives a solar energy equivalent of more than 5000 trillion KWh per year, which
is far more than its total annual consumption. The daily global radiation is around 5KWh per
sq.m per day with sunshine ranging between 2300 and 3200 hours per year in most parts of
India. Though the energy density is low and availability is not continuous, it has now become
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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

possible to harness this abundantly available energy very reliably for many purposes by
converting it to usable heat or through direct generation of electricity. The conversion systems
are modular in nature and can be appropriately used for decentralised application.

2.2.2 Wind energy


This involves generation of electricity through wind turbines that harness the power of
the wind. This energy is one of the safest and cleanest forms of energy. By 2008, the capacity of
wind farm worldwide was around 100000 MW. Wind power contributed about 1.3% of global
electricity consumption, with Denmark using 19% of this electricity, 9% used by Portugal and
Spain, and the Republic of Ireland and Germany using 6%.
The highly successful wind power programme in India was initiated in 1983-84 and is
entirely market driven. This sector has been growing over 35% in the last three years. India
currently (year 2008) stands fourth in the world among countries having installed large capacity
wind generators after Germany, USA and Spain. The current (July 2008) installed capacity for
wind power stands at 8696 MW, and is mostly located in Tamil Nadu, Gujarat, Maharashtra and
Rajasthan. The government aims to add 10000MW from wind during XI plan period (2007-12).

2.2.3 Biomass energy


It uses crops, woods and agricultural wastes to produce electricity and heat. In Brazil
ethanol now provides 18 percent of the country's automotive fuel. The USA has wide availability
of ethanol fuel and biodiesel.
A large quantity of biomass is available in our country in the form of dry waste like agro
residue, fuel wood, twigs etc., and wet wastes like cattle dung, organic effluents, sugarcane
bagasse, banana stems etc., the potential for generation of electric power/ cogeneration is 16881
MW from agro residues and 5000MW from bagasse through cogeneration. The potential from
urban waste is 2700 MW. Also, there is vast scope of production of bio-diesel from some plants.
These plants require little care, can be grown on fallow land and can survive in harsh climatic
conditions. Energy farming may be adopted in marginal and infertile lands of the country.

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

2.2.4 Hydropower
It uses energy of moving water to rotate a generator which in turn produces electricity.
The world's largest power plant complex for hydroelectricity is the Three Gorges Dam project in
Hubei, China, (21,515 MW). The largest single hydroelectric power plant is the Itaipu power
plant in Brazil-Paraguay border . In 2008, electricity production was 94,684,781 MWh (94.7
TWh).
Hydro resources of capacity less than 25 MW are called small, less than 1 MW are called
mini and less than 100KW are called micro hydro resources. The total potential is 15000MW out
of which 2015 MW has been realised by approximately 611 plants.

2.2.5 Geothermal energy


It is the heat in the earth which can be utilised to produce energy. The largest geothermal
power installation is The Geysers in California (750 MW).
The potential in geothermal resources in the country is 10,000MW. As a result of various
resource assessment studies/surveys, nearly 340 potential hot springs have been identified
throughout the country. Most of them are low-temperature hot-water resources and can best be
utilised for direct thermal applications. Only some of them can be considered suitable for
electrical power generation. The geothermal reservoirs suitable for power generation have been
located at Tattapani in Chhattisgarh and Puga valley of Ladhak, Jammu & Kashmir. A 300 KW
demonstration electric power plant is being installed in Tattapani. Hot water resources are
located at Badrinath, Kedarnath and few other locations in Himalayan region and elsewhere.
They are being used mostly for heating purpose and very little has been developed.
Renewable energy carries with itself a number of benefits providing social,
environmental and economical security. The following criteria should be met by efficient energy
sources:

Not deplete or adversely affect natural resources;

Have minimal or no negative impact on environment or society;

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

Be safe to consume today and not possess the uncertainty risk for future generations.

Protect air, land and water against pollution;

Have little or no emissions of greenhouse gases or net carbon;

Meet the needs of consumer today and in the future in an accessible and efficient way;

All these criteria could be met by renewable energy and thus it could become sustainable for
future.

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

CHAPTER 3

SOLAR ENERGY

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

CHAPTER 3

3.1

Solar- The centre stage of renewable energy


The radiant heat and light energy from the Sun is called as solar energy. This is the most

readily and abundantly available source of energy. Since ancient times this energy has been
harnessed by humans using a range of innovations and ever-evolving technologies.
The earth receives more energy in just one hour from the sun than what is consumed in
the whole world for one year. This energy comes from within the sun itself through process
called nuclear fusion reaction. In this reaction four atoms of hydrogen combine to form one
helium atom with loss of matter. This matter is emitted as radiant energy.
India is a tropical country with sunshine in plenty and long days. About 301 clear sunny
days are available in a year. Theoretically, India receives solar power of about 5000 trillion
kWh/yr (600 TW approx.) on its land area. On an average, daily solar energy incident over India
ranges from 4 to 7 kWh/m2. Depending on the location sunshine hours varies from 2,3003,200
hours in a year. This is far more than current total energy consumption. For instance, assuming
conversion efficiency of 10% for PV modules, it will still be thousand times greater than the
likely electricity demand in India by the year 2015.
This energy from the sun is used as solar thermal and solar power applications. Solar
thermal energy, through various technologies, is utilised for various purposes which includes
Heating, Drying, Cooking, seasoning of timber, water treatment (Distillation and disinfection),
Cooling (Refrigeration and Cold storage), High temperature process heat or industrial purposes
Solar power is the conversion of sunlight into electricity. Photovoltaic or PV is used to
convert Sunlight directly into electricity, or uses concentrating solar power or CSP to indirectly
generate electricity. Solar Photovoltaic or SPV cells convert solar radiation into DC electricity
directly. SPV finds a number of applications in areas such as Domestic or household lighting,
Street lighting, electrification in rural or village areas, water pumping, desalination of salty
water, powering of remote telecommunication repeater stations and railway signals.

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

3.2

Advantages of Solar Energy

3.2.1 Environmental friendly

Solar Energy is renewable, clean, and sustainable form of energy which helps in
protecting our environment.

It does not create pollution by releasing gases like nitrogen oxide, carbon dioxide,
mercury and sulphur dioxide into the atmosphere as many conventional forms of energy
do.

Solar Energy, therefore, does not contribute to global warming, acid rain or smog.

It actively contributes to the decrease of harmful green house gas emissions.

Since solar energy does not use any fuel, it neither increases the cost nor

does it add to

the problems of the transportation and recovery of fuel or the storage and disposal of
radioactive waste.
3.2.2 Saves money

After the recovery of initial investment, the Suns energy is practically FREE.

The payback period for the investment can be short depending on electricity usages of
household.

The government provides financial incentives so as to reduce the cost incurred.

Your utility company can buy the additional energy that your system produces, building
up a credit on your account. This is called net metering.

It's not affected by the supply and demand of fuel and is therefore not subjected to the
ever-increasing price of gasoline.

3.2.3 Independent/ semi-independent


Solar Energy can be utilized to balance out consumption of energy supplied by utility. It
does not only reduce the electricity bill, but will also supply our business/home with electricity
whenever there is a power outage.
These systems can operate completely independent, without a connection to a gas or
power grid at all. Therefore they can be installed in remote locations, like holiday log cabins,
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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

thus these are more practical as well as cost effective as compared to the supply of utility
electricity to a remote and new site.
Solar Energy enhances local job opportunities and wealth creation, thus contributing to local
economies.
3.2.4 Low/ no maintenance

Solar Energy systems once installed will last for decades and are almost maintenance
free.

Once installed, there are no recurring costs.

They do not consist of moving parts, creates no noise, do not release any offensive smells
and do not require addition of any fuel.

Addition of solar panels is easy in case your family's needs grow in future.

The dependence on non-renewable sources of energy could be reduced and lesser threat
on environment will be posed if we find channels of efficient utilisation of solar energy.

3.3

Solar Photovoltaic
Solar photovoltaic (SPV) is the process of converting solar radiation (sunlight) into

electricity using a device called solar cell. A solar cell is a semi-conducting device made of
silicon or other materials, which, when exposed to sunlight, generates electricity. The magnitude
of the electric current generated depends on the intensity of the solar radiation, exposed area of
the solar cell, the type of material used in fabricating the solar cell, and ambient temperature.
Solar cells are connected in series and parallel combinations to form modules that provide the
required power.

Figure 3.1: SPV Technology


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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

3.3.1

Crystalline solar cells


Most solar cells are made of a single crystal or multi-crystalline silicon material. Silicon

ingots are made by the process of crystal growth, or by casting in specially designed furnaces.
The ingots are then sliced into thin wafers. Single crystal wafers are usually of 125 125 mm or
larger sizes with pseudo-square shape; multi-crystalline wafers are typically square-shaped
with a dimension of 100 100 mm or larger. Using high temperature diffusion furnaces,
impurities like boron or phosphorous are introduced into the silicon wafers to form a pn
junction. The silicon wafers are thus converted into solar cells. When exposed to sunlight, a
current is generated in each cell. Contacts are attached to the top and bottom of each solar cell to
enable inter-connections and drawing of the current.

3.3.2

Thin-film solar cells


Thin-film solar cells are made from amorphous silicon (a-Si), copper indium

selenide/cadmium sulphide (CuInSe2/CdS) or cadmium telluride/cadmium sulphide (CdTe/CdS),


by using thin-film deposition techniques. These technologies are at various stages of
development and have not yet reached the maturity of crystalline silicon. Production of thin-film
PV modules is also limited.

3.3.3

PV module
PV modules are usually made from strings of crystalline silicon solar cells. These cells

are made of extremely thin silicon wafers (about 300 um) and hence are extremely fragile. To
protect the cells from damage, a string of cells is hermetically sealed between a layer of
toughened glass and layers of ethyl vinyl acetate (EVA). An insulating tedlar sheet is placed
beneath the EVA layers to give further protection to the cell string. An outer frame is attached to
give strength to the module and to enable easy mounting on structures. A terminal box is
attached to the back of a module; here, the two ends (positive and negative) of the solar string are
welded or soldered to the terminals. This entire assembly constitutes a PV module. When the PV
module is in use, the terminals are connected either directly to a load, or to another module to
form an array. Single PV modules of capacities ranging from 10 Wp to 120 Wp can provide
power for different loads. For large power applications, a PV array consisting of a number of
modules connected in parallel and/or series is used.
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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

3.3.4 Standard Capacity/Ratings and Specifications:


The wattage output of a PV module is rated in terms of peak watt (Wp) units. The peak
watt output power from a module is defined as the maximum power output that the module could
deliver under standard test conditions (STC). The STC conditions used in a laboratory are

1000 watts per square metre solar radiation intensity

Air-mass 1.5 reference spectral distribution

25 C ambient temperature.

Figure 3.2: SPV modules

SPV modules of various capacities are available, and are being used for a variety of applications.
Theoretically, a PV module of any capacity (voltage and current) rating can be fabricated.
However, the standard capacities available in the country range from 5 Wp to 120 Wp. The
voltage output of a PV module depends on the number of solar cells connected in series inside
the module. In India, a crystalline silicon module generally contains 36 solar cells connected in
series. The module provides a usable direct current (DC) voltage of about 16.5 V, which is
normally used to charge a 12-V battery.
In an SPV system, the components other than the PV module are collectively known as
balance of system (BoS), which includes batteries for storage of electricity, electronic charge
controller, inverter, etc. These batteries are charged during the daytime using the DC power
generated by the SPV module. The battery/battery bank supplies power to loads during the night
or non-sunny hours. An inverter is required to convert the DC power from the PV module or
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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

battery to AC power for operating the load. Some loads such as DC pumps do not require an
inverter or even a battery bank.

3.4

Standards for SPV


Photovoltaic standards in India have been established by the Bureau of Indian Standards

(BIS). So far, there are eight standards prescribed by the BIS for SPV. These standards mainly
relate to the areas listed below.

SPV terminology

Measurements of cells and modules

Methods of correcting the measurements

Qualification test procedure for crystalline silicon modules

General description of SPV power generating systems

Parameters of stand-alone SPV systems

Standards are under preparation for BoS components such as batteries, inverters, and charge
controllers. These standards are based mainly on the corresponding International Electro
technical Commission (IEC) or European standards.

3.5

Advantages of SPV Systems

The major advantages of using SPV systems are as follows.

Abundant solar radiation is available in most parts of India. Hence, SPV systems can be
used anywhere in the country.

SPV systems are modular in nature. Hence, they can be expanded as desired and used for
small and large applications.

There are no running costs associated with SPV systems, as solar radiation is free.

Electricity is generated by solar cells without noise.

PV systems have no moving parts. Hence, they suffer no wear and tear.

As most of the components of SPV systems are pre-fabricated, these systems can be
installed quickly. Hence, PV projects have short gestation periods.
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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

SPV modules have long-life, and require no maintenance. Only BoS components such as
batteries and inverters require minor maintenance.

3.6

SPV Lighting Systems:


SPV lighting systems are becoming popular in both the rural and urban areas of the

country. In rural areas, SPV lighting systems are being used in the form of portable lanterns,
home-lighting systems with one or more fixed lamps, and street-lighting systems. Applications in
urban areas include glow-sign display systems on the streets, traffic signalling, message display
systems based on light-emitting diodes (LEDs), and systems to illuminate advertisement
hoardings.

3.6.1

Solar street lighting system:


A solar street-lighting system (SLS) is an outdoor lighting unit used to illuminate a street

or an open area usually in villages. A CFL is fixed inside a luminary which is mounted on a pole.
The PV module is placed at the top of the pole, and a battery is placed in a box at the base of the
pole. The module is mounted facing south, so that it receives solar radiation throughout the day,
without any shadow falling on it.

Figure 3.3: Solar Street Light

A typical street-lighting system consists of a PV module of 74 Wp capacity, a flooded


leadacid battery of 12 V, 75 AH capacity, and a CFL of 11 W rating. This system is designed to
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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

operate from dusk to dawn (that is, throughout the night). The CFL automatically lights up when
the surroundings become dark and switches off around sunrise time. The cost of an SLS is about
Rs 19 000. Variations in the cost are possible on account of local taxes, additional transportation
costs, etc. The Ministry provides financial assistance for the promotion of some of the above
solar lighting systems among eligible categories of users.

3.7

SPV power plants:


In an SPV power plant, electricity is centrally generated. This electricity is either made

available to users through a local grid in a stand-alone mode, or connected to the conventional
power grid in a grid-interactive mode. Stand-alone power plants provide grid-quality power
locally to people to meet their requirements for lighting and other needs. Power plants are
preferred over individual SPV systems if a number of users are in close proximity. The cost of
power may be of the order of Rs 15 per kWh for a grid-interactive power plant and higher for
stand-alone power plant.

Figure 3.4: SPV Power Plant

3.7.1

Stand-alone SPV power plant:


A stand-alone SPV power plant is typically designed for specific requirements. The

capacity of a stand-alone power plant varies from 1 kWp to 25 kWp, and in some cases even
higher. These systems are used where conventional grid supply is not available, or is erratic or
irregular. A stand-alone power plant functions like an uninterrupted power supply system (UPS)
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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

and provides a constant, stable, and reliable supply to the loads. These power plants can also be
used in areas where grid supply is available; in such places the power plants operate like a hybrid
power plant, working with grid, as well as with SPV. The capacity of its battery bank depends on
user requirements. The most common use for such plants is the electrification of remote villages.
Other uses include power for hospitals, hotels, communications equipment, railway stations,
border outposts, etc., Stand-alone SPV power plants comprise PV array, battery bank, inverter,
and charge controller. Depending on the system voltage, SPV modules are arranged in series and
parallel combinations. The standard combinations are 2, 4, 6, 10, 20 or more modules. The
corresponding system voltages are in the range of 24 to 240 V. The size of the battery bank is
determined by the system voltage and ampere-hour requirements of the load. The inverter is
selected based on the system voltage and peak-load capacities. Other components such as
junction boxes, distribution boxes, and cables are selected according to the maximum amount of
current to be handled by them. The cost of a stand-alone power plant depends on the PV array
size, battery bank capacity, inverter, etc. The approximate cost of a standalone power plant is
between Rs 3.00 lakhs and Rs 3.50 lakhs per kW of PV capacity. Distribution costs (such as in a
village) may be extra.

3.8

Solar Generators
A solar generator is a small capacity, stand-alone SPV power system based on a PV

array, connected to a battery bank and an inverter of appropriate size. This system is designed to
supply power to limited loads (such as lights and fans) for a period of two to three hours daily in
situations such as conventional power failure or load-shedding. The MNES currently promotes
four models of solar generators, with capacities of 150, 350, 450, and 600 Wp. These solar
generators are mainly meant to replace the conventional small-capacity petrol-based generators
that are used during routine load-shedding periods in urban areas by shops, clinics, and other
small establishments. The components of a typical solar generator are a small SPV array
connected to a battery bank of appropriate size and an inverter based on 12, 24, or 48 V. The
system is designed to supply power to loads such as lights, fans, credit-card operating machines,
and personal computers for a period of two to three hours. The cost of the four solar generator
models promoted by the MNES varies from Rs 35 000 to Rs 145 000.

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

3.9

Building-integrated PV Systems
In a building-integrated photovoltaic (BIPV) system, PV panels are integrated into the

roof or faade of a building. BIPV systems are becoming common in Europe, the USA, and
Japan. The SPV panels generate electricity during the daytime, which is used to meet a part of
the electrical energy needs of the building. BIPV systems have significant potential in India,
where a large number of buildings are constructed every year for different purposes, and where
energy consumption in buildings is growing at a rapid rate. Although the initial costs of a BIPV
system are high, long-term savings result from a reduction in electricity consumption. India
needs more experience in the field of BIPV technology. In order to encourage this application
and to prepare manufacturers and users, the Ministry supports BIPV projects by meeting 80% of
the cost of PV modules installed in the systems on government and semi government buildings.

3.10 SPV Pumping System


Water pumping is one of the most important applications of PV in India. An SPV water
pump is a DC or AC, surface-mounted or submersible or floating pump that runs on power from
an SPV array. The array is mounted on a suitable structure and placed in a shadow free open
space with its modules facing south and inclined at local latitude. A typical SPV water-pumping
system consists of an SPV array of 2003000 Wp capacity, mounted on a tracking/non-tracking
type of structure. The array is connected to a DC or AC pump of matching capacity that can be
of s u r f a c e - m o u n t e d, submersible, or floating type. Interconnecting cables and
electronics make up the rest of the system. SPV water pumps are used to draw water for
irrigation as well as for drinking.
The normal pumping heads are in the range of 10 metres (m) for irrigation, and 30 m for
drinking water. It is possible to use pumps with even greater head, especially for drinking water
supply. The SPV array converts sunlight into electricity and delivers it to run the motor and
pump up water. The water can be stored in tanks for use during non-sunny hours, if necessary.
For maximum power output from the SPV array, the structure on which it is mounted should
track the sun. Electronic devices are used to do this in some models, thereby enabling the
systems to operate at maximum power output. The power from the SPV array is directly
delivered to the pump in the case of DC pumps.
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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

In the case of AC pumps, however, an inverter is used to convert the DC output of the
array into AC. No storage batteries are used in an SPV pump. An SPV pump based on a onehorsepower motor can irrigate about 11.5 hectares of land under a variety of crops except paddy
and sugar cane (assuming a 10-m water table). Using the same pump along with drip irrigation, it
is possible to irrigate up to 6 hectares of land for certain crops. A two-horsepower SPV pump
could irrigate about 23 hectares of land under many crops except paddy and sugar cane (again
assuming a 10-m water table).

Figure 3.5: SPV pumping systems

The cost of an SPV pump depends on the capacity and type of pump. For example, a DC
surface pump with a 900 W array may cost about Rs 150 000; a similar pump of 1800 W may
cost about Rs 300 000; and an 1800 W AC submersible pump may cost about Rs 422 000.

3.11 Solar Energy in India


India lies in the sunny regions of the world. Most parts of India receive 47 kWh
(kilowatt-hour) of solar radiation per square metre per day with 250300 sunny days in a year.
The highest annual radiation energy is received in western Rajasthan while the north-eastern
region of the country receives the lowest annual radiation. Solar energy, experienced by us as
heat and light, can be used through two routes: the thermal route uses the heat for water heating,
cooking, drying, water purification, power generation, and other applications; the photovoltaic
route converts the light in solar energy into electricity, which can then be used for a number of
purposes such as lighting, pumping, communications, and power supply in un-electrified areas.

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

Energy from the sun has many features, which make it an attractive and sustainable option:
global distribution, pollution free nature, and the virtually inexhaustible supply.

Figure 3.6: Solar Radiation in India.

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

CHAPTER 4

BIPV- BUILDING INTEGRATED


PHOTOVOLTAIC SYSTEMS

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

CHAPTER -4

4.1

BIPV - Introduction

4.1.1 General terminology:


BIPV refers to photovoltaic systems integrated with an object's building phase. It means
that they are built /constructed along with an object. They are also planned together with the
object. Yet, they could be built later on. Due to specific task, cooperation of many different
experts, such as architects, civil engineers and PV system designers, is necessary.
4.1.2 Experts terminology:
Building Integrated Photovoltaic (BIPV) refers to the architectural, structural and
aesthetic integration of photovoltaic (PV) materials into buildings. They form part of the building
exterior such as the roof, faade or skylight. They are usually used for off grid micro-generation
for buildings, although on-grid applications can also be found.
BIPV can be integrated into the building at the time of construction as well as it can be
added once the building has been prepared. These two approaches are respectively known as
fresh fit and retrofit. The former that is the fresh fit is usually more preferred due to cost savings
in labour and materials. Additionally, this method also allows for greater aesthetic planning,
allowing the solar modules to blend in better with the structure.
The above definition gives a fair idea about BIPV stating that its an integration to the
building but its not simply the similar kind of integration just because of the orientation of the
sun which is the ultimate focus of the whole BIPV system, thus it is necessary to place the
components of BIPV system keeping in mind the peak intensity of the solar radiation.
Keeping in mind the above fundamental, there are a number of building integrated
photovoltaic system are in use so as to capture the maximum of the solar radiation throughout the
year, thus in the section given below we will discuss about the various types of BIPV system.

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

4.2

Types of BIPV system

We have classified BIPV into the following four types:


1.

Roof integrated systems

2.

Facade integrated systems

3.

Retrofit roof or facade systems

4.

PV used as a shading system either built with the building or retrofit.

Description of all the above four techniques are as given below:


4.2.1 Roof integrated systems:
The roof integrated BIPV system which is the integration of the panels into the roof of
the building serves two purposes, first as a roof and secondly as an electricity generator. It
replaces the conventional roof while allowing the natural sunlight to filter through. As a roof, the
BIPV serves as structural and weather condition requirements by providing structural strength
and stability; it protects against the damages like chemical and mechanical damage; preventing
against fires; protecting against rain, sun, wind, and moisture; it allows heat absorption and heat
storage; controls the diffusion of light, etc. In addition to these features it serves as an electricity
generator through meeting part of the electrical load requirements of the building.
The BIPV modules for roofs (which are based on crystalline technology) are available in
the three forms. Although the detail about the module is being covered in the technical analysis
chapter but readers are advised to once go through it because it is appropriate to describe this
here.

Single glass element: Here the solar cells are laminated on a single glass with transparent
encapsulation that allows light to pass through space between cells.

Double glass element: In this case, the solar cells are sandwiched between two glasses
with transparent encapsulation; this encapsulation reduces heat losses from indoor
building spaces.

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

Double glazing element, in which a third glass is fixed at the bottom of the double glass
element, with vacuum in between the second and the third glass to reduce heat losses.

Figure 4.1: Flat rooftop


4.2.2

Figure 4.2: Sloped rooftop

Facade mounting:
The word faade comes from the French language, literally meaning "frontage" or "face".

A faade is generally one side of the exterior of a building, especially the front, but also
sometimes the sides and rear.
In case of faade integrated system, PV in integrated once the building is constructed. PV
is usually integrated into the south faade, for maximum utilization.
Module comes in different colour so adding more flexibility to the architects as far as the
aesthetic view is concerned. The typical BIPV faade is vertical, and integrated with clear
glazing and semi-transparent PV modules. However, vertically oriented PV panels produce less
electricity as compare to the solar panels slanting towards the sun. The reduction is greatest in
the summer when the sun is high up. So facades can be sloped in to a saw tooth design top
absorb maximum solar energy. Semi transparent glazing does not allow direct sunlight to enter
the building, thus reducing cooling loads and glare. Opaque PV material can be used in building
structural members.
Integrated faade system requires a high degree of refinement to get sufficient cooling of
the modules. In architecture, the facade of a building is often the most important from a design
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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

standpoint, as it sets the tone for the rest of the building. Many facades are historic, and local
zoning regulations or other laws greatly restrict or even forbid their alteration.

Figure 4.3: Facade mounting


The low powered systems of up to some 10 kW are usually integrated into the south
facade. Facade integrated photovoltaic systems could consist of different transparent module
types, such as:

Crystalline PV modules

Micro-perforated amorphous transparent modules.


In such case a part of natural light is transferred into the building through the modules.

Solar cells are available in different colours; therefore, there is no limitation for imagination of
the architect or the designer. We can say that such constructed buildings give the term
architecture a completely new meaning.
The best results and efficiency can be reached with systems, which are tightly integrated
into the passive solar buildings; however, the use of active solar systems is an additional
possibility. This is where the modules are partially transmitting allowing natural light to
penetrate the building. Undoubtedly, such systems challenge even the best of architects. High
level of expertise is required for successful BIPV systems planning, not only in regard to
architecture, but also to civil and photovoltaic engineering. The projects realized in the past show
that a successful BIPV system designing is based heavily on technical experience and

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

knowledge. Poorly designed systems usually have to be redesigned or repaired later,


consequently swelling maintenance costs and lowering system efficiency rate.
Inside the BIPV system, photovoltaic (PV) panels are integrated into some of the building
components, such as glass plates on curtain wall glass system, window shades, skylight systems,
etc. They functioned as normal parts of a building and at the same time generate electricity.

4.3

Market Segmentation of BIPV system:

Market segmentation describes about the four types of building where BIPV system in mostly
used.
1. Residential buildings These mainly use roof integrated systems. Cost is a major concern
for this segment, with the focus being on lower RoI time and increased efficiency. The
residential buildings that we are considering for the analysis are single dwelling, attached and
multi unit house buildings.
2. Commercial buildings These are large BIPV systems used by major companies and
organisations where they feel that it is more cost effective in the long term than conventional
power sources. This is usually done in parts of Europe where there is a large support policy
for BIPV.
3. Industrial buildings - since industrial buildings are large in area and hence if we can even
prove BIPV in one such building then this could be an initiative towards the grand success of
BIPV in industrial buildings.
4. Government and PSU buildings: Its is a difficult task to convince customer without showing
the practical viability of the similar kind of the projects thus if BIPV is first being proved to
the government buildings then it could serve as a showcase for all the BIPV customers.

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

4.4

Global & Indian Scenario

Factor

Japan

Germany

Italy

Spain

India

US

Solar

~1051

~950

~1000-1500

~1300

~1700-2500

~1000-2100

isolation

kWh/kWp/yr

kWh/kWp/yr

kWh/kWp/yr

kWh/kWp/yr

kWh/kWp/yr

kWh/kWp/yr

Installed

1919MW

3862MW

120.2MW

655MW

112MW

830.5MW

0.32 to 0.43

0.44 to 0.49

0.32 to 0.34

0.23

$0.39/kWh(>1

maximum

00kWh)

PV
Feed-in

tariff

(Depending

(Euro/kwp)

on capacity)

$2.50/Wp

or

$0.39/kWh
(<100kWh)
Subsidies

50%

of

Subsidized

50% of costs

$2.50/Wp (for

system

loan at 5.2%

for modules of

residential

installation

fixed for 5 or

5 kWp

purpose),

cost,

10 yrs upto 20

maximum, at

$3.25/Wp for

33% for local

yrs

Rs.

govt Based on

200,000/kWp,

PBI(performa

50% of cost

nce

for modules of

index)&

1 kWp

EPBB(Expect

maximum

ed

capped at Rs.

Performance-

100,000/kWp

Based

govt

based

Buy-

Down)
Tax credits

3-year

55%

4% (2009) on

100%

tax

10% tax credit

property tax

Only for solar

total capacity

credits

on

after 2008

credit

thermal

installed

installations

PV

NO

with
system

=>100kW

Table 4.1: Country wise Comparison of BIPV system


Source: Solar global report card.2008

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

4.4.1

Indian scenario:
Installed PV Capacity:

Cumulative installed as of September 2007: 112 MW2 (97.3% off-grid)

Cumulative installed end 2006: ~100MW (98% off-grid)

Cumulative installations growth rate: 2005-2006: +16.3% 2006-2007: +12%

Annual installations growth rate 2006-2007: -14%

State-level feed-in tariffs:

Punjab: ~Rs 8.93/kWh NSRE policy

West Bengal: Rs 11/kWh

Haryana: ~Rs 15.75/kWh

Direct Capital Subsidies:

Building Integrated PV systems: 50% of costs for modules of 5 kWp maximum,


capped at Rs. 200,000/kWp (US$ 4,860).

Solar power packs: 50% of cost for modules of 1 kWp maximum capped at Rs.
100,000/kWp (US$ 2,430).

Tax Credits:

80% accelerated depreciation in the first year for grid-connected systems. Not
available in conjunction with the Generation Based Incentive. No cap.

Ten consecutive-year tax exemption on income from sale of electricity within 15


years of setting up of the project.

Import duty exemptions

Subsidized Loans:
IREDA may provide loans at 9-10%.
Source: Global solar report card, 2008

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

4.5

Technical Analysis

4.5.1 Installation of BIPV & Component details:

Installation Of BIPV

As the title indicates, this part of the report gives a fair detail to the layman about how to
install BIPV system and what are the basic components of the BIPV system

How to install a BIPV system:

To install BIPV in newly constructing house or to the home already constructed the very first
thing we need to decide that whether we need to fulfill all our electricity requirements by solar
BIPV or to utilize BIPV as a substitute to the presently used conventional electricity. Once we
have decided this, the very second step is to decide the capacity being installed accordingly, it
needs a little knowledge of electrical terminologies otherwise we require to take the help of a
consultant or directly the BIPV installers to calculate it.
Lets understand how to calculate the household power capacity required.

Step-1: Calculate daily power used:

Method 1:
To do this, take the last 12 monthly power bills and calculate the average kilowatt hour
(kWh) usage per month. The reason we use 12 is because our power consumption fluctuates with
the seasons.
Then divide the monthly usage by 30 (the average number of days in a month, to get the daily
power used.
So for example: If the monthly power consumption of 800 kWh (which is generally in a double
story upper class 4 bhk house), then the daily consumption is 800/30= 26.7 kWh per day.
Now if we want to halve the power bill then you need to produce 26.7 / 2 = 13.4 kWh of solar
panel watt power per day.

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

Method 2:
If we dont have the electricity bill then there is a way to calculate the power
consumption by means of the electrical appliances used. All it needs to know is the capacity,
hours of use and the hours of use per day of these equipments.
Some of these appliances with all the details are as given below: Sr Equipment

Capacity

Number

no

Hours of Consumption
use/day

/year

Tube-light

5-10 watts(taking 10w)

8hrs/day

146000 watt

Bulb

60 watts

4 hrs/day

438000 watt

Air-conditioner

1000 watts

4hrs/day

1060000 watt

Fan

10-50

8hrs

350400 watt

watts

(taking 4

30w)
5

Computer

370 watts

8 hrs/day

1080400 watt

Television

100 watts

2hrs/day

73000 watt

Total

3147800 watt
= 3147.80 kw

Table 4.2: Calculation of the per year consumption with the listed equipments
Source: Power consumption of equipments is taken from www.absak.com
Power consumption per year = 3147.80 kWh (from table 3.1)
Power consumption per day = 3147.80/365 = 8.62 kWh
Power consumption per hour = 7.66/24 = 0.359 kW

Step 2 - Calculate total solar panel watt needs:


To do this, first determine how many usable hours of sunlight the area receives per day.

This is taken from a solar insulation map.


For example sunshine hour per year in India = from 2300 to 3200 = 2750 (average)
Thus average sunshine hours per day = 2750/365= 7.5 hours per day
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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

Now we know the daily sunlight hours (i.e. 7.5 hours) and we have calculated per hour
power consumption in Step1 (i.e. 13.4 kWh from method 1), thus if we divide the per hour
power consumption by total sunshine hours in a day then we will get the power capacity
required. This is calculated below:13.4

KWh / 7.5hrs = 1.78 kW or 1780 Watts

Thus 1.78kW is the power that we require for our house but since there are some energy
losses from the solar panel watt wiring, battery, and inverter which is approximately 25% thus to
get the desired power we need to install system which is capable of generating 1.78kW power
with 25% energy losses. Thus the system would be 125% of the desired power.
Hence solar panel capacity should be:
1780*1.25 = 2225 watts
Now we are able to calculate the BIPV capacity that the house will require. After
knowing this we need to calculate the cost of the BIPV system which requires the financial
analysis of the 2.234 kW BIPV system which is being detailed out in a topic named financial
analysis.
For a fair idea the general cost for a 2kW BIPV system could be around 8 lakhs with major of the
cost required for PV module.

Step 3 - Calculate solar panel watt costs


This step will help to work out the cost of the solar panels needed to make 2234 Watts of

power. At the moment the lowest cost for solar panels based on multi-crystalline technology is
Rs. 180 from the Indian manufacturer.
Since PV modules participate generally around 68% of the total cost of the BIPV system
thus we can arrive at a rough estimate of the total BIPV cost that we are going to install. The
detailed analysis of all these components and their financial part is described in the further part
of the report - In our example: It will cost us at the most 2234 x Rs.180 = Rs. 4, 02,120 to install
solar panels to halve our power bill.
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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

Since this forms only around 68% of the system cost, thus the total system cost could be
= Rs. 5, 91,352.9 which comes around Rs. 264.7/watt.
General cost breakup component-wise:

Module: 68%

Inverter: 11%

Support structure: 7%

Mechanical work: 6%

Electrical work: 5%

Quality control: 3%

Source: ENVISION consulting report

Step 4 - Offset tax credits and rebates


We need to take tax incentives and rebates in account which we get from the government

and thus we need to deduct that from the initial amount.


With the BIPV installation subsidy of subsidy of 50% of module cost maximum up to Rs.
2, 00, 000. Hence 50% of module cost= 50% of Rs. 4, 02,120= Rs. 2, 01,060 would be paid by
the government.
Source: MNRE website
Thus the price reduces to Rs. 5, 91,352.9 - Rs. 2, 01,060 = Rs. 3, 90,293 i.e. Rs. 174.7/watt
Since there are many factors that go into calculating the solar panel watt costs, please
only these steps as a rough estimate The above are the general steps which give a layman a fair
idea on deciding whether to install BIPV system in the house or not.

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4.6

Components of BIPV System


As we discussed earlier, A BIPV system typically have 4 basic components named as PV

module, inverters, battery and BOS (balance of system). Given below we have discussed the
description, technical and electronic details and some other information of all these components.

PV module:
In the terms of photovoltaic, a photovoltaic module or photovoltaic panel is a packaged

interconnected assembly of photovoltaic cells, also known as solar cells.. An installation of


photovoltaic modules or panels is known as a photovoltaic array. Photovoltaic cells typically
require protection from the environment. For cost and practicality reasons a number of cells are
connected electrically and packaged in a photovoltaic module, while a collection of these
modules that are mechanically fastened together, wired, and designed to be a field-installable
unit, sometimes with a glass covering and a frame and backing made of metal, plastic or
fiberglass, are known as a photovoltaic panel or simply solar panel.

Figure 4.4: Process of PV lamination


While describing about the PV module the very common term being used is Photovoltaic
cells known as PV cells or solar cells. Thus as mentioned below we have described about what is
PV cell.

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Solar PV technologies used in BIPV

Crystalline silicon solar cells

Mono
crystalline PV
modules

Thin film solar cells

Poly crystalline
PV modules

Amorphous
silicon PV
modules

Cadmium
telluride PV
modules

Copper indium
diselenide PV
PV modules

Figure 4.5: Types of PV modules


Module and cell efficiency:
Technology
A-SI
Cell
efficiency
Module
efficiency
Area
neededPer
KW(for
modules)

4-7%

~15m2

CdTe

8-10%

~11m2

Thin films
CI(G)S
A-si/Si

7-11%

~10m2

6-8%

Dye s.
cells

16-22%

14-16%

13-19%

12-15%

~7m2

~8m2

2-4%

~12m2

Table 4.3: Efficiencies of various cells and modules


Source: EPIA report of September 2008

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Crystalline silicon
mono
multi

Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

Lowest Prices PV Module ($/Wp):


Crystalline silicon (mono)

$2.9/watt(DM solar)

A-si thin film

$1.85/watt (Aten solar)

CdTe thin film

$1.5/watt (first solar)

C(I)GS

$6/watt(global solar)

A-si/Si

Dye s. cells

Table 4.4 lowest prices of various PV modules

Photovoltaic cells are one of the most basic components of solar energy production. A solar cell
or photovoltaic cell is a device that converts sunlight directly into electricity by the photovoltaic
effect. Sometimes the term solar cell is used for devices that are intended specifically to capture
energy from sunlight, while the term photovoltaic cell is used when the light source is
unspecified. Assemblies of cells are used to make solar panels, solar modules, or photovoltaic
arrays.
Photovoltaic is the field of technology and research related to the application of solar cells in
producing electricity for practical use. The energy generated this way is an example of solar
energy (also called solar power).

Solar inverter:

A solar inverter is a type of electrical inverter that is made to change the direct current (DC)
electricity from a photovoltaic array into alternating current (AC) for use with home appliances
and possibly a utility grid.
Solar inverters may be classified into three broad types:

Stand-alone inverters: used in isolated systems where the inverter draws its DC
energy from batteries charged by photovoltaic arrays and/or other sources, such as
wind turbines, hydro turbines, or engine generators.

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Grid-tie inverters: which match phase with a utility-supplied sine wave. Grid-tie
inverters are designed to shut down automatically upon loss of utility supply, for
safety reasons. They do not provide backup power during utility outages.

Battery backup inverters: These are special inverters which are designed to draw
energy from a battery, manage the battery charge via an onboard charger, and export
excess energy to the utility grid. These inverters are capable of supplying AC energy
to selected loads during a utility outage, and are required to have anti-islanding
protection.

Battery:
A battery is an electric storage device, which can be found in any number of shapes,

sizes, voltages and capacities. When two conducting materials (often-dissimilar metals) are
immersed in a solution, an electrical potential will exist between them. If connected together
through a closed circuit, a current will flow.
Batteries can be connected in series to achieve whatever voltage is required (add the
number of 2 volt cells), and in parallel to achieve the capacity required (add the capacities of
each parallel battery or string of batteries).
For larger systems, a number of series of strings may be connected in parallel with each
other. This achieves both a higher voltage and capacity.
Series Wiring refers to connecting batteries to increase volts, but not amps. If you have
two 6 volt batteries like the Trojan L16 rated at 350 amp hours, for example, by connecting the
positive terminal of one battery to the negative terminal of the other, then you have series wired
the two together. In this case, you now have a 12 volt battery and the rated 350 amps do not
change. If you were to series wire four L16's you'd have 24 volts at 350 amps, and so on.
Parallel wiring refers to connecting batteries to increase amps, but not volts. If you have
two 6 volt batteries like the Trojan L16 rated at 350 amp hours, for example, by connecting the

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

positive terminal of one battery to the positive terminal of the other, and the same with the
negative terminal, then you have parallel wired the two together.

Batteries in parallel

Batteries in series

Batteries in series & parallel

Fig 4.6: Series and parallel connection of solar batteries

Charge controller:
Charge controllers, which protect battery from over charging and/or excessive discharge,

are the essential component of Solar PV system.

Figure 4.7: Charge Controllers


A solar charge controller (or solar regulator) is an essential component of most solar charging
systems over 10W. A charge controller protects your battery from overcharging and protects
your panel from reverse current flow.

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Components of solar charge controllers:


TCB PV combiner box
Power Meters
Battery Cables
Ground Fault Protection
Fuse Blocks & Fuses

Different types of charge controllers:

Controller up to 10 A

Controller up to 30 A

Dual solar controllers

24 V solar controller

Charge controllers are sold to consumers as separate devices, often in conjunction with solar
or wind power generators, for uses such as RV, boat, and off-the-grid home battery storage
systems. In solar applications, charge controllers may also be called solar regulators.
Types of charge controllers:
1. Series charge controller
2. Shunt charge controller
A series charge controller or series regulator disables further current flow into batteries when
they are full. A shunt charge controller or shunt regulator diverts excess electricity to an auxiliary
or "shunt" load, such as an electric water heater, when batteries are full.
Simple charge controllers stop charging a battery when they exceed a set high voltage level,
and re-enable charging when battery voltage drops back below that level.

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

Company

Products/Services

Sunglow Energy Ltd.

BIPV, solar power plants, hybrid energy, windfarms , biofuels

Tata BP solar

BIPV components

NYX

Switchable glass, BIPV, e glass, led glass, speciality glass

Solar-Apps

Marketing, sales, distribution, solar, module, light, logistics,


technology, manufacturing, road studs, street light, BIPV, thin
film, licensing

PV

Power Solar panel, photovoltaic modules, BIPV

Technologies Pvt Ltd


Solar boards, solar system, hand water pumps, solar pumps,
solar led light kit, advertising and promotional material,
Inventure overseas inc

balloons, inflatable, led lamps, water heaters, solar hoardings,


bands, solar ups, water pumps, solar display box, solar for
security

Alpex Exports Pvt Ltd

Solar Panels, BIPV Solar Panels, Photovoltaic


Table 4.5 List of BIPV suppliers in India

Sources: Websites of the above mentioned companies

Metering

Net meter:

Net meter is a single meter which is used to measure in- and out-flow; the customer
automatically receives compensation from the utility for any excess electricity produced at the
full retail electricity rate.
Net metering is an electricity policy for consumers who own (generally small) renewable
energy facilities, such as wind, solar power or home fuel cells. "Net", in this context, is used in
the sense of meaning "what remains after deductions.

Dual meter:

Without net meter, a small-solar system owner would be required to use two electric
meters--one to measure electricity consumed from the grid, and the other, installed at the
customers expense, to measure any extra electricity sent back to the grid when the PV system
produces more than needed.

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4.7

Positioning of Panels
The direction and angle that the panel faces can have a big impact on its performance by

affecting the amount of light that hits the panel each day through the year. Some solar panels
move continuously to track the sun but most will not go to the expense and difficulty of
implementing that.
To get it right we have to make sure that the panels get hit by the maximum amount of
light. This happens when the sun is directly above the panel.

Figure 4.8: Ideal positioning of the solar panels

As you can see from above, the angle that the sun hits a panel changes the amount of exposure.
At 30 degrees from the panel, the panel is only exposed to 50% of the light of the sun, at 60
degrees, 87% and at 90 degrees, 100%. This happens because the sun emits the same number of
photons in a square cm, but once we put our panels on an angle, those photons are spread across
a larger area.
As we all know, at different times of the day the sun moves through the sky and so any
stationary panels get exposed to different angles, so what is directly above at one time of the day
will not be at the next. What you might not know through is when the sun it at its highest it is not
necessarily straight up, but may be off by an angle. And that angle is different at different times
of the year and different at different latitudes. This angle is to the south in the northern
hemisphere and the north in the southern hemisphere.

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

Figure 4.9: Movement of sun during the seasons


So we need to take all of this into account. Luckily what is good for your neighbor (aka your
rough latitude), is good for you too. So below is a table that will show you what angles to have
your panels on, at different latitudes, at different times of the year.
4.7.1 Solar panel calculator:
The benefits of this calculator over the above data is that it gives the solar zenith angle by
means of which we can calculate that what should be the ideal angle of our panel with respect to
the perpendicular position from the earth so as to get the optimum amount of efficiency from the
solar panels.
The only thing you need to know is the latitude, longitude, pressure and temperature of
your city which is easily available from the internet. Thus by means of the solar panel calculator
one can calculate the angle with which the panel needs to be set every second of the minute of
the hour to get the maximum amount of efficiency but since it is not possible to change your
panel position every single second thus one can calculate it once in a week or simply for a
month.Given below is a sample for the Bangalore city showing the solar zenith angle and other
details.
The entry is based on the following assumption:
Latitude of Bangalore city - 12 58' N
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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

Longitude of Bangalore city - 77 38' E


Data about Bangalore conditions as on 17 June 2009 (Time 1:05 minutes 15 seconds):
Pressure (mB)
Temperature (C)

Interface of the solar calculator:

29.85 inches / 1011 mB


Hi:81F/27C
Lo: 68F / 20C

Solar Position Calculator Results:

Figure 4.10: solar panel calculator interface showing the details for Bangalore city
Reference: http://solardat.uoregon.edu/SolarPositionCalculator.html
By clicking in the above link we can calculate the solar zenith for any specified area by
giving the latitude, longitude and some other useful details as asked in the calculator interface.

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

Solar zenith angle: The angle between the local zenith and the line of sight to the sun. If: point A
= the ground site (where you are); point Z = any point directly above point A (The zenith); point
B = the sun; then the solar zenith angle = the angle ZAB.

Figure 4.11: showing solar zenith angle


Since we know that the peak efficiency from the sun can be achieved if the position of
the solar panel is forming 90 with the sun. Now, once we know about the solar zenith angle at
different times of the year, we can manipulate the rotation of the PV module so as to form the 90
so as to get the peak efficiency of the modules throughout the year. For example if the solar
zenith angle comes to be 66.72 then we need to place the solar panel by 23.28 from the vertical
position to the earth.

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CHAPTER 5

PROJECT DETAILS

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

CHAPTER - 5

5.1

Objective:
To provide alternative solar energy solutions for domestic, industrial and commercial

establishments, in order to mitigate the energy problems in backward villages of the state.
To develop and deploy village specific electricity generation system and package based on Solar
Technology/ Solar Wind Hybrid Technology.

5.2

Introduction
During 2006-07, the Government of India notified The Rural Electrification Policy,

which lay down the broad framework for rural electrification programs in the country.
The Rural Electrification Policy has laid down that in villages/habitations where grid
connectivity would not be feasible or not cost effective, off-grid solutions based on stand-alone
systems may be taken up for supply of electricity. Solar stand alone is one such system.
India receives solar energy equivalent to over 5,000 trillion kWh per year. The daily average
solar energy incident varies from 4 -7 kWh per square meter depending upon the location. The
annual average global solar radiation on horizontal surface, incident over India is about 5.5 kWh
per square meter per day. There are about 300 clear sunny days in most parts of the country.
Karnataka is ideally suited for exploiting the solar potential for electrification with the available
technology.

5.3

Remote Village Electrification Programme


The Remote Village Electrification Programme of the Ministry was initiated for

electrification through renewable energy sources of those un-electrified remote census villages
and remote un-electrified hamlets of electrified census villages where grid connectivity is either
not feasible or not cost effective. The RVE Programme has also been suitably adapted with the
rural electrification policy.

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

The government of Karnataka desires to implement the application of solar technology to


provide rural energy solutions. The meeting held on 15.01.2009 and in this regard, presided by
Honble RDPR minister, Government of Karnataka, Miss. Shobha karandlaje deliberated the
matter in detail. The following were the resolutions.

The Solar system application to be implemented in identified cluster villages of the 39


most backward Talukas of the state as per Dr. D.M Nanjundappa Committee Report.

Target is to cover villages with minimum of 100 households and above and to cover a
minimum of 100 village clusters during the current financial year 2009-10.

Solar Technology applications to be implemented in a comprehensive manner for


solutions in following areas.
i. Domestic Home Lighting
ii. Street lights in village/panchayats limits
iii. Heating applications
iv. Drinking water purification with special emphasis on deflourination.
v. Applications in milk pasteurization plants at village/hobli levels.
vi. Shallow well irrigation pumps for agriculture.
vii. Irrigation pumps in lift irrigation schemes.
viii. Any other.

The solar technology to be inconformity with MNRE GOI, standards/ specifications.

The technology provider to indicate the rate at which Kwh or unit of power can be made
available.

The Solar technology providers to identify cluster of villages/where in they can execute
and may come out with RFQs on annuity basis; while taking full responsibility of
installation, maintenance and reliable functioning of the technology provided by them on
a sustainable basis.

KREDL/ RDPR respective Zilla Panchayats (Taluka Panchayats / Gram panchayats) and
respective implementation departments in district level will work in close coordination.

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

5.4

Guidelines for Preparation of Proposals:


Eligible Projects & Eligibility Criterion:
Stand alone individual village based or decentralized solar power generation and

distribution facilities including solar wind hybrid systems for a village cluster in the 39 most
backward Talukas identified by the Dr D M Nanjundappa Committee (Annexure-3).There may
be around 3900 Villages, per Taluka@ 90 to 100 villages.

The Rural Solar Power generation and Supply Projects will be undertaken
on Build Own and Operate basis.
The projects should be owned by the solar technology provider with the responsibility for overall
operation / management resting with them for a period of initial 10 years.

The capital cost would have to be mobilized by the solar energy technology provider
from the user fee to be collected on monthly basis as annuity over a period of 10 years after
deducting the MNRE incentive if any considered.
The Technology provider will be eligible for MNRE incentives as per norms.

Technical Performance Optimization:

With a view to encourage technology development and reduction in the cost of the project
developers are expected to utilize the state of the art technology to set up the projects. They are
expected to use large capacity and higher power output PV / Thermal modules available for the
specific technology used in setting up the power projects. Qualification of PV modules, to be
used in grid interactive power plants, in accordance the standards issued by BIS or IEC 61215
certification or other international Certification on qualification of PV modules will be
necessary..
The electronics, cables, controls, structures etc. must qualify to latest BIS or
International standards which are acceptable to utilities and which fulfill all safety norms for
grid/off grid power projects. The Solar PV/Thermal power project developers will provide a
copy of the test certificate(s)/ report(s) latest with the proposals.

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

The PV /Thermal power project technology providers are required to optimize generation
of electricity in terms of kWh generated per MWp of PV/thermal capacity installed vis--vis
available solar radiation at the site (may be obtained through use of efficient electronics, lower
cable losses, maximization of power transfer from the modules to electronics and the grid,
maximization of power generation by enhancing incident radiation by optional methods like
seasonally changing tilt angles etc).

PV power project developers will be required to maintain and provide to KREDL technical
information on daily solar radiation availability, hours of sunshine, duration of plant operation
and the quantum of power fed to the grid. The project developer will install suitable instruments,
meters and data loggers for this purpose. This information will be provided at the time of
commissioning. This will help in estimation of generation in kWh per MWp PV array capacity
installed at the site.

Identification of villages / hamlets:

Identification of suitable villages / hamlets, which have a conducive environment for


implementation of such Rural Solar energy Projects is critical. The village / hamlet identified
should be backward /remote, and may include a tribal or forest-fringe village / hamlet. A
cohesive and progressive social structure is also an important requirement. The village / hamlet
should have a minimum of 100 and maximum of 500 households and should be identified in
consultation with ZP TP GP and rural development departments / agencies.

Preparation of a Village Energy Plan:

A Village Energy Plan will have to be prepared, with active and full participation of the
village community. An assessment of the total energy demand should be made. The minimum
energy services to be provided for in any project should include requirements.

Based on the total energy requirements production system would have to be configured and latest
Solar Technology Solutions offered.

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

Formation of a Village Energy Committee:

Full participation of the village community should be secured from inception. The
constitution of a Village Energy Committee should be through the Gram Sabha and got duly
notified by the Gram Panchayat as a Sub-Committee or Standing Committee of the Gram
Panchayat as per the relevant provisions of the Panchayati Raj Act and rules in this regard. Care
should be taken that the elected Panchayat member/s from that village are ex-officio members of
the VEC. The respective Zilla Panchayat should actively co-ordinate the formation of VECs.
Creation of a Village Energy Fund:
A Village Energy Fund should be got created under the provisions of the Panchayati Raj
Act, initially with nominal beneficiary contributions of Rs 200 per household for sustained
operation and management of the project. Subsequent monthly / annual user charges would have
to be deposited in this account. Grants from other Government programmes such as rural
development, tribal development, etc., if available, should be placed in this account. The Fund
should be managed by the Village Energy Committee with two signatories nominated by the
Committee. One of the signatories would be the Gram Panchayat member who is the ex-officio
member on the Committee. A separate capital account should also be got created, for receipts
towards supply and installation of the energy production units. This Capital Account would also
be operated by the VEC in accordance with the same procedure of joint signature and
maintenance of accounts, which govern the Village Energy Fund. Both the VEF and the Capital
Account of the VEC, being the accounts of the Gram Panchayat under the provisions of the law,
would be subject to the processes of accounts maintenance and audit that apply to the Gram
Panchayat. Expenditure of funds by the VEC should be disclosed to the Gram Panchayat at its
monthly meeting as prescribed under the Panchayati Raj Act and Rules. VEC, being a SubCommittee of a Standing Committee of the Gram Panchayat would also be under obligation to
disclose information in accordance with the Right to Information legislation. It will also be
authorized to submit the Utilisation Certificate to the Gram Panchayat, which in turn will submit
the Utilisation Certificate to the agency concerned at the district level.

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

Guidelines for Implementation of The Rural Solar Energy Projects:


The projects would be undertaken by the solar technology providers duly facilitated by
implementing agencies such as Grama Panchayats, Taluka Panchayats and Zilla Panchayats,
NGOs, entrepreneurs, franchises, co-operatives, etc. An implementing agency would forward the
proposals for the projects to the RDPR through the KREDL.

The proposals should, inter-alia, include the following information:-

1. Village Energy Plan


2. Confirmation about setting up of Village Energy Committee
3. Creation of Village Energy Fund
4. Implementation modalities and Technology
5. O&M arrangements - Phase - I, 10 Years and phase II, 11 to 20 years (20 years).
6. Per unit energy cost to be supplied on a sustainable basis - Phase-I, 10 Years

and

phase II, 11 to 20 years on a yearly basis.


7. Commitment about capital cost and funds for operation and management - Phase - I,
10 Years and phase II, 11 to 20 years
8. Recovery pattern from village energy users per energy unit on monthly basis.
9. Plan for Training village community.
10. Minimum hours of supply / day on sustainable basis

The projects should be owned by the solar technology provider with the responsibility for
overall operation / management resting with them for a period of initial 20 years/ extendable.
During this period, the implementing agency would train local youth in the operation and
management of the unit. After this period, the responsibility of operation / management should
be undertaken by the Village Energy Committee. The District Advisory Committees on
Renewable Energy with the Deputy Commissioners as the Chairman, CEO ZP as MemberSecretary and comprising district-level functional heads and prominent citizens should be
involved in the implementation of the projects. The KREDL would have to closely monitor the
implementation of the projects. The Zilla Panchayath will provide monthly progress reports to

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

the RDPR and KREDL until commissioning. Thereafter, they should forward quarterly reports
on performance and other feedback to the RDPR and KREDL
Implementation mode:
The following sequence of activities will be adopted for implementation of projects:

Notification by the state Government for the Rural Solar Technology Programme in
Cluster villages of 39 most backward Talukas.

Submission of proposals to the Government on Village/cluster of Villages basis in the 39


most backward Talukas.

Preparation of Detailed Project Reports by the Solar technology Providing agency as per
the enclosed format for the villages/hamlets to be taken up for electrification under the
Programme;

Preparation of the plan for sustained operation of the projects O&M including the
revenue model/user fee collection proposed; and coordination with the village level
bodies for actual implementation the project.

Approval of the DPRs and the proposals by the Government.

Implementation of the project.

Certification by the authorized villages/district level officials/bodies as per the


requirements of the National Rural Electrification Policies.

5.5

Financial Assistance Guidelines


The capital cost would have to be mobilized by the solar energy technology provider and

the Rural Solar Energy Project to be operational. Solar energy technology provider will
subsequently recover the costs from the user fee to be collected on monthly basis as annuity over
a period of 10 years after deducting the MNRE incentives that may be passed on to the solar
energy technology provider as per rules.
Release of the State Financial Assistance (SFA) towards the capital cost will be into the
designated capital account of the Village Energy Committee as per the following pattern:-

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

Initial and full release of state financial assistance along with the 10%
solar energy production system configured based on the total energy
requirements with due formation of VEC and latest Solar
Technology Solutions offered indicating the supply cost /rate per
unit in the DPR against work order with agreement execution.

The operation, maintenance and management costs would have to be met through user
charges for the energy services technology provider. However, if it becomes critical for the
sustainability of the project, financial assistance towards operation, maintenance and
management costs will be provided. Evidence of serious efforts made to recover user charges
would have to be provided. Service charges @10% for monitoring, evaluation and reporting
feedback on performance. Funds for awareness creation, training, seminars, workshops, etc. will
be provided on merit on case by case basis. Service charges released to the KREDL after
completion of the project. Certificate of a project having been successfully implemented and
made operational, as per the Sanction Order, shall have to be provided by the State Nodal
Agency KREDL, after obtaining the same from the Village Energy Committee..

5.6

Monitoring:
The Rural Solar Power Project Technology Providers will install suitable instruments and

make adequate arrangements to monitor the performance and ensure satisfactory operation to
supply rural energy needs on a sustained basis.

KREDL will make suitable arrangements to monitor the progress and performance of the
Rural Solar Power Project. The KREDL may also visit the project site and provide their feedback
and recommendation to RDPR/Government. All Rural Solar Power Projects will be open to
inspection by the officials from the Government and any independent organization appointed by
the Government for performance monitoring. The KREDL may also undertake field evaluation
studies for any of the Rural Solar Power Projects through professional and independent
organizations.

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

Progress Report:
The project developers of all approved projects will be required to submit annual

progress report about the project and the annual report of the company, which has set up and own
the rural solar power project plant.

5.7

General Terms and Conditions:

Mere submission of application/proposal would not mean approval of government to any


of the project.

The government may through KREDL or through hired experts, get the performance of
the approved project appraised, for its operations as per stated conditions.

The government may also designate outside consultants/institutions for monitoring the
performance after commissioning. The technology provider will undertake as a
precondition to provide all necessary assistance and data to the authorized consultant.

The technology provider will be required to provide data on performance of the project
on quarterly basis to the concerned ZP/TP/GP and also to KREDL.

The technology provider will have to submit the operating and design data for a period up
to 5 years after commissioning and the government /KREDL may use it in whatever
manner deemed necessary for promotion of the programme and fulfillment of the
objectives.

The government /KREDL will have right to publish case studies/success stories/articles
technical papers on the performance of the project, wherein due acknowledgement to the
technology provider will be given.

The achievements made during the course of the project will be covered
photographically/electronically and sent to the ZP/TP/GP/KREDL.

The technology provider will display a notice board at a prominent place at the project
site to the effect that the project is a pilot project for Rural Solar Technology.

The award of the project by the Government/ KREDL/ ZP/TP/GP will not make it a party
to any liability which may arise on account of operation of the project such as accidental
injury to human or livestock, damage of any property or surroundings etc.
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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

5.8

Relevant extracts from the National Rural Electrification Policies, 2006


Goals include provision of access to electricity to all households by the year 2009, quality

and reliable power supply at reasonable rates, and minimum lifeline consumption of 1
unit/household/day as a merit good by year 2012.
For villages/habitations where grid connectivity would not be feasible or not cost
effective, off-grid solutions based on stand-alone systems may be taken up for supply of
electricity. Where these also are not feasible and if only alternative is to use isolated lighting
technologies like solar photovoltaic, these may be adopted. However, such remote villages may
not be designated as electrified.
State government should, within 6 months, prepare and notify a rural electrification plan
which should map and detail the electrification delivery mechanism. The plan may be linked to
and integrated with district development plans. The plan should also be intimated to the
appropriate commission.
Gram panchayat shall issue the first certificate at the time of the village becoming eligible
for declaration as electrified. Subsequently, the Gram Panchayat shall certify and confirm the
electrified status of the village as on 31st March each year.
The state government should set up a committee at the district level within 3 months,
under the chairmanship of chairperson of the Zila Panchayat and with repressentations from
district level agencies, consumer associations, and important stakeholders with adequate
representation of women.
The district committee would coordinate and review the extension of electrification in the
district and consumer satisfaction, etc.
Panchayat Raj institutions would have a supervisory/advisory role.
Institutional arrangements for backup services and technical support to systems based on nonconventional sources of energy will have to be created by the state government

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

CHAPTER 6

FINANCIAL APPRAISAL

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

CHAPTER - 6

6.1

Objective

The objective of the financial appraisal is to find whether the project is financially is viable or
not. The viability of the project is determined by the following two aspects;

6.2

Servicing of debt.

Meeting returns expectations.

Financial Appraisal of the Project

The financial appraisal of the project would review the estimated cost of the project, proposed
means of financing, cash flow projections, viability parameters and sensitivity as well as scenario
analysis.

Cost of Project

Cost of project consists of broadly following components:


1. Cost of construction.
2. Project management consultancy cost
3. Preliminary expenses
4. Preoperative expenses like Administration and establishment, legal and audit fees etc.
5. Bank commission and appraisal charges
6. Interest During construction

Cost of construction:
As elaborated in the previous chapter the cost of construction for Solar photovoltaic
comes out to be Rs. 270/ watt. A contingency of 1% has considered in the cost of construction.
Hence the cost of construction of the project of 144.45 MW comes out to be Rs. 3919.26
Crore.

Project management consultancy Fees:


The PMC fees considered under the total project cost is 1% of the cost of construction.
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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

Preliminary expenses:
The preliminary expenses in form of market survey and preparation of feasibility report
are considered Rs. 5 crore.

Preoperative expenses:
Preoperative expenses like Administration and establishment , legal and audit fees re
considered at Rs. 4 crore approximately.

Bank commission and appraisal charges:


Bank commission charges for providing bank guarantee is considered at the rate of 1%
per annum of Bank guarantee provided. Bank appraisal fees of Rs. 50 lacs is considered
which be initially paid to the bank.

Interest during construction:


Interest during construction in case of our project has two components viz., Interest for
Long term loan @ 12% p.a. and Interest for bridge loan @ 14% p.a.

After taking all the components of cost into consideration the total project cost comes out to be
Rs. 4177.08 crore.

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

Phase - I
1st &
2nd Qtr.
COST OF CONSTRUCTION
PV modules
Inverter
Battery
Charge controller
Support Structure
mechanical Work
Electrical Work
Quality Control, System
Design Miscellaneous
Contingency
TOTAL
OTHER COST
PMC Fees
Admin & establishment
expenses
Legal & Audit Fees
Insurance
TOTAL OTHERS
Interest during construction
Total Capitalized cost
BASE CASE COST
COST TO BE WRITTEN OFF
Bank Commission charges
Bank Appraisal charges
Market survey and Preparation of
Feasibility reports (Preliminary Exp)
TOTAL
BANK GUARANTEE MARGIN
TOTAL PROJECT COST

Phase - II
3rd Qtr.

Phase - III
4th Qtr.

Total
Year
2

941.18
154.35
677.65
135.53
97.88
82.82
67.76

383.60
62.91
276.19
55.24
39.89
33.76
27.62

336.38
55.17
242.19
48.44
34.98
29.60
24.22

1661.15
272.43
1196.03
239.21
172.76
146.18
119.60

41.41
21.99
2220.58

16.88
8.96
905.06

14.80
7.86
793.63

73.09
38.80
3919.26

22.21

9.05

7.94

39.19

3.90
0.01
4.44
30.56
74.96
2326.10
2251.13

1.81
10.86
915.92
915.92

3.90
0.01
1.59
7.84
9.52
50.94
126.39 201.35
929.55
4171.56
803.15
3970.20

0.001
0.50

0.001
0.5

5
5.501

5
5.501

0.02

0.02

2331.616

915.916

Table 6.1 Cost of Project

~ 76 ~

929.545

4177.08

Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

Means of finance:

To meet the cost of project the following means of finance are considered:
1. State financial assistance.
2. Central financial assistance.
3. Equity.
4. Long term debt
5. Bridge loan.

State financial assistance: A state financial assistance up to 10% of total capital cost (i.e. Rs.
391.926 crore) will be provided by the state government (Karnataka government) during the
initial stage of project.

Central financial assistance: Central Financial Assistance (CFA) in form of capital subsidy

will be available from the Ministry for installation of the SPV systems. Stand-alone SPV
Power plants more than 1 kWp the subsidy given is Rs.125/Wp. 50% of CFA will be
released in advance along with sanction of project.

Equity: Effective equity required for the project under consideration comes out to be 25%

of total project cost. A major of the equity would be used in paying the interest for both
long term debt and Bridge loan.

Long term debt: The Effective long term debt component is 24% of total project cost.
The normative interest rate considered is 12%. The repayment of loan begins from the
first year of commercial year of operation. The normative loan outstanding as on April
1st of every year is worked out by deducting the cumulative repayment up to March 31st
of previous year from the gross normative loan. Loan tenure of 1 year is considered.

Bridge loan: A bridge loan (i.e. short term loan) of amount equivalent to the central
financial assistance is used for meeting the payments to suppliers of equipments. The
~ 77 ~

Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

interest rate considered is 14%. The loan is entirely repaid after completion of project i.e
at the start of second year.

State financial assistance

391.926

391.926

CFA

902.801

902.80 1805.603

Equity

367.405

274.775

367.338

1009.518

debt - Long term

669.484

189.741

110.807

970.031

0.000

451.401

451.401

debt - Bridge Loan

-902.801

TOTAL

0.000
4177.08

Table 6.2 Means of Finance

Depreciation
Value base for depreciation considered is capital cost of asset. Accelerated depreciation
of 80% of capital cost is considered through written down value method.

Revenue
The tariff considered is Rs15/unit.

Project cash flows


The cash flow statement shows the movement of cash into and out of the project during
its life time. Since the project is being appraised from the point of view of developer so
we have laid stress on equity cash flows of the project. The key assumptions are as
follows:

Operation and maintenance expenses: The O & M expenses assumed are Rs. 9 lakhs/
MW. The escalation rate considered is 5.72% per year.

Revenues: The main components considered under revenues are:


1) Revenues from the sale of electricity.
2) CDM benefits availed per year

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

Taxes: Exemption under section 80 IA of income tax act is considered. The tax rate
considered is 33.66%. The rate considered for MAT ( i.e. minimum alternate tax ) is
17%.

Financial viability parameters


The key financial parameters considered are as follows:

IRR (Internal rate of return)

NPV ( Net present value)

DSCR (Debt service coverage ratio)

Payback period

Analysis
Two types of risk analysis have been done in the appraisal:

Sensitivity analysis

Scenario analysis

The three most sensitive factors considered are

1. Cost of construction:
From the table below we can analyse the variation of the Equity IRR with variation in the
cost of construction. By increasing the cost by 10% the equity IRR reduces to 13.02%
and reducing the cost of construction by 10% the equity IRR increases to 25.11%. By this
analysis we come to know that cost of construction is the most important factor and it has
the highest impact in the rate of return on the project.

2. Tariff rate:
The tariff rate is the criteria based on which the developer proposal will be evaluated. By
the analysis we have found out that in order to get the required rate of return the tariff to
be quoted is Rs. 15 per unit.

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

3. Interest rate for long term debt:


The interest rate is not as sensitive as the cost of construction and tariff, due to
availability of the government subsidy the proportion of debt is less.
Yr.

COST OF PROJECT
2010-11
Cost of Construction

3919.3

Other Costs

50.9

Interest During Construction


Costs to be written off

201.4
5.5

Bank Guarantee margin

0.02
4177.1

MEANS OF FINANCE
State Financial Assistance
Central financial Assistance
Equity

391.9
1805.6
1009.5
970.0
4177.1

Debt

RESULTS
Equity IRR

NPV
DSCR
Payback

18.08%
3.56
2.05
6 yrs.

GROSS
FLOWS

REPAYMENT

1
2
3
4
5
6
7
8
9
10
11
12

1181.4
290.7
270.9
265.5
272.4
281.6
291.4
301.2
311.1
316.8
252.4

1010.6
107.8
107.8
107.8
107.8
107.8
107.8
107.8
107.8
0.0
0.0

13
14
15
16
17
18
19
20

251.5
250.6
249.7
248.6
247.6
246.4
245.2
244.0

0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
1872.83

Table 6.3 Analysis

Scenario

Most Pessimistic
Base Case
Most Optimistic

SCENARIO ANALYSIS
Cost of
Tariff
consrucution
Rate
%
Rs/Unit
+10%
13.00
0.00
15.00
-10%
17.00
Table 6.4 Scenario Analysis
~ 80 ~

Interest
%
13%
12%
11%

IRR
%
8.71%
18.08%
31.33%

Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

SENSITIVITY ANALYSIS

Cost of Construction
IRR%
Tarrif Rate
IRR%
Interest Rate
IRR%

Most pessimistic

Base Case

Most optimistic

+10%
13.02%
13
13.55%
13%
17.53%

0.00
18.08%
15
18.08%
12%
18.08%

-10%
25.11%
17
22.68%
11%
18.65%

Table 6.5 Sensitivity Analysis

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

CHAPTER 7

CONCLUDING OBSERVATION

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

CHAPTER 7

7.1

Social Desirability of the project

The government of karnataka has taken the initiative to electrify remote villages of 39 talukas
through this project.

The villages considered are very remote, where the possibility of electrification through
grid system is not feasible. Hence solar PV stand alone system is implemented in this
project.

The benefits availed by the villagers through this project are

Domestic lighting improves the standard of living.

Irrigation through SPV pumping system will increase the agricultural


productivity.

Electrification of schools would enhance the education level in the village.

Electrification of shops, Milk pasteurization plant would increase the business


opportunities in the village.

Electrification of clinics would help the villagers in availing better medical


facilities.

7.2

Technical Feasibility of the project


The present cost of installing the SPV stand alone system is Rs.270/W. The PV modules

considered are crystalline modules having an efficiency of 20%. But due to extensive R&D in
this area it is expected that the cost of the system could gradually decrease and gain parity with
other sources of power production
It is estimated that the cost of the SPV system will decrease by approx 20% with
doubling of the total installed solar power capacity from present level.

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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

7.3

Financial Aspects of Project

Cost of project
The implementation of the solar technology for electrification of villages proves
to be a very costly for the developer. Hence many private players are not
interested in such type of projects.
However the government in order to encourage the private players to participate
in such projects, it provides various subsides to the tune of 50% of the total
project cost.
The cost of the project we have considered in this appraisal is likely to decrease
due to the enhancement of the technology in the future.
The equipments that are used in the project are purchased in India, Government is
taking initiative to setup solar module manufacturing units in India so that the
module cost will further decrease in turn decreasing the project cost.

O & M Expenses
The O & M expenses are very less compared with other sources of production.
They normally come to be 0.05% of the total cost of the project.

Revenue
The tariff considered here is Rs.15 per unit in order to obtain the required rate of
return. This tariff is very high and it is not feasible for the consumers to pay.
Hence it is divided into two components, Government subsidy and tariff from the
consumers.
Initially the consumer will hesitate to pay more for the usage of electricity. Hence
we propose that the tariff should increase gradually over the life time of the
project (i.e Rs 14 per unit initially and gradually increase it to Rs 16 per unit).
The village energy committee is formed for the successful implementation of the
project. They are also responsible for creating village energy fund for sustained
operation and management of the project. Subsequent monthly / annual user
charges would have to be deposited in this account.
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Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

The recovery of the monthly user charges from the consumer is backed by the
government.

Means of Finance
As the cost of the project is high the long term debt that is provided by the bank is
also high. Hence to make is feasible for bank to finance the DSCR should be more
than 2.
The repayment period can also be increase by 2 years in order to make the project
feasible for the developers.

Returns
In this appraisal the equity IRR obtained is 18.08% at a tariff rate of Rs.15 per
unit, which is comfortable for the developer.
Since this project is first of its kind the above rate of return is reasonably
substantial.

~ 85 ~

Financial Feasibility of solar power project with special reference to rural electrification of 39 talukas in Karnataka

BIBLIOGRAPHY
BOOKS
Khan B.H, Non Conventional Energy Resources, The McGraw Hill, 2009
Prasanna Chandra, Projects Planning, Analysis, Selection, Financing, Implementation and
Review, Tata McGraw-Hill, 2002

WEBSITES
www.mnes.nic.in
www.kredl.kar.nic.in
www.solar4power.com
www.solarbuzz.com
www.cercind.gov.in
www.kerc.org

DRAFTS
Jawaharlal Nehru National Solar Mission
Implementation of Solar Photovoltaic Programme MNRE (Solar Photovoltaic group)

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