Professional Documents
Culture Documents
Utilities
September 2017
Introduction
• Solar Rooftops comes with several benefits but it also has some un-intended impacts
on traditional utility business models
• Solar rooftop segment has seen rapid proliferation in countries like USA, Germany, United
Kingdom, Japan etc.
• Business models adopted vary across countries, some key learnings on challenges for utility
are :
1. Reduction in sales volume due to large procurement from solar rooftops
2. Difficulty in recovery of fixed cost because of long term purchase agreements & already
installed infrastructure (dependence on volumetric sales)
3. Difficulty in recovery of cross-subsidy charges due to migration of high paying consumers
from the utilities to solar rooftop; high number of consumption slabs
4. Managing variability in generation of solar rooftop for variable load
5. Injection of solar power during off-peak periods and withdrawal by the consumers during
peak periods (consumers not covered under TOD)
6. Treating utility grid as a backup power source by rooftop consumers (no banking charges)
7. Technical issues like phase imbalance due to solar rooftop projects, quality of utility
power, etc.
8. Increase in administration burden (application processing, inspection, connectivity,
metering and billing etc.)
9. Safety and security issues during operation and maintenance of grid
3 @ 2017 Deloitte Touche Tohmatsu LLP
Approach for the Study
Revenue
3. Odisha (CESU,
Utility- Financial
Number of Consumers • Avoided Capacity & avoided energy during peak hours
7. Gujarat (PGVCL,
Power consumption across DGVCL)
category 8. Uttar Pradesh
• Active & reactive power support – rooftop solar generation
T & D Loss (DVVNL, PVVNL)
0
Rs. /kWh
-1.29 -1.89
-2 -2.87
-1.94 -3.03
-4 -3.04 -3.26 -3.92
-3.09 -5.75
-5.45 -5.45 -5.59
-6
-6.27 -6.81
-7.30 -6.49
-8
-10
-12
DVVNL
BSES R
BSES Y
NESCO
APEPDCL
APSPDCL
TSNPDCL
DGVCL
TPDDL
WESCO
PVVNL
MSEDCL
SOUTHCO
CESU
TSSPDCL
TANGEDCO
PGVCL
Maha Delhi Odisha AP Telangana TN Gujarat UP
Revenue reduction Grid charge reduction to utitliy (10%) Banking charge loss to utility
Deemed RPO benefits T& D loss benefits Environmental benefits
Utilities with low energy charge have lower negative impact. Utilities having high T&D losses will gain
from rooftop solar
6 @ 2017 Deloitte Touche Tohmatsu LLP
Case 1 - Highest tariff paying consumers switches to rooftop solar
Scenario-2: Impact of Cross subsidy considering Env. benefits, Deemed RPO, Grid & Banking charges
5
5
5.66 5.39
5.01
3 4.24
3.27 3.33 3.10 3.49 3.18
2.46 2.13 2.21
1.07 1.12 0
Rs. / kWh
1 0.54 0.68
-0.10
-1
-5
-3
-10
-5
-7 -15
NESCO
BSES R
BSES Y
DVVNL
APEPDCL
APSPDCL
TSNPDCL
DGVCL
TSSPDCL
PVVNL
MSEDCL
TPDDL
CESU
SOUTHCO
WESCO
PGVCL
TANGEDCO
Maha Delhi Odisha AP Telangana TN Gujarat UP
Cross-subsidy loss Grid charge reduction to utitliy (10%) Banking charge loss to utility
Deemed RPO benefits T& D loss benefits Environmental benefits
Total
Utilities with low level of cross subsidy levels will have lower impact. Consumer categories having
@ 2017 Deloitte Touche Tohmatsu LLP
7 energy charge lower than CoS & adopting rooftop solar will benefit utilities.
Case 3 – Highest Tariff paying consumers switches to rooftop solar
Scenario: Impact assuming no Cross subsidy with no Env benefits and Solar REC price @ Rs 0.5 per unit
3 2.44
-1
-3
-5
BSES R
BSES Y
DVVNL
NESCO
APEPDCL
APSPDCL
TSNPDCL
DGVCL
PVVNL
MSEDCL
TPDDL
PGVCL
SOUTHCO
CESU
WESCO
TSSPDCL
TANGEDCO
Maha Delhi Odisha AP Telanga TN Gujarat UP
Cross-subsidy loss Grid charge reduction to utitliy (10%) na Banking charge loss to utility
Deemed RPO benefits T& D loss benefits Environmental benefits
Total
Rajneesh Sharma
Senior Manager | Consulting – Energy & Resources
Deloitte Touché Tohmatsu India LLP
7th Floor; Building 10, Tower B, DLF Cyber City Complex, DLF City
Phase – II,
Gurgaon - 122002, Haryana, India
Phone: +91-9971798764
Email: rajneeshs@deloitte.com
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are
legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/about for a more detailed description of DTTL and its member firms.
This material and the information contained herein prepared by Deloitte Touche Tohmatsu India LLP (DTTILLP) is intended to provide general information on a particular subject or subjects and is not an exhaustive
treatment of such subject(s). None of DTTIPL, Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the “Deloitte Network”) is, by means of this material, rendering professional advice
or services. The information is not intended to be relied upon as the sole basis for any decision which may affect you or your business. Before making any decision or taking any action that might affect your personal
finances or business, you should consult a qualified professional adviser.
No entity in the Deloitte Network shall be responsible for any loss whatsoever sustained by any person who relies on this material.
©2017 Deloitte Touche Tohmatsu India LLP. Member of Deloitte Touche Tohmatsu Limited