What are the major challenges in setting a solar farm?

The energy demand and requirement in India is on an ever-increasing scale, in the light of urbanization and technological advancement. The country relies heavily on fossil fuel to meet its daily energy requirements and derives 69.5% of the total electrical demands through thermal power. Concerns regarding supply and other additive environmental problems of such conventional energy sources have paved the way for the booming demand for renewable energy sources. Apart from the unlimited source supply, these energy sources are eco-friendly and can be transformed into usable energy with negligible emissions in the form of pollutants and gases. India, by virtue of its tropical insolation, has a theoretical solar capacity of about 5000 trillion kilowatt-hours (kWh) annually, ready to be utilized through various initiatives, set with an ambitious target of 100 GW of solar power till 2022. Currently, India boats 42 solar project parks, with a net energy capacity of 34.4040 GW.

Even though the well-established advantages of commercial sustainable energy production, the growth of the solar energy industry is impeded by several ground barriers and bottlenecks faced by solar power developers in India. The sector suffers particularly due to several constraints, overlaps and policy gaps in regulations, that act as the major challenges and require urgent considerations, to commercialize and harvest solar energy. The commonly encountered hurdles of inappropriately skilled and experienced manpower, a dearth of vendors for efficient and quality equipment, and the deep-rooted dependency in conventionally produced energy constitute only a fractional portion of the major technical challenges faced in setting up a solar farm.

1. Availability of baseline data and technical supplements: Thesolar energy industryis relatively new in India and continues to remain associated with several high-risk factors. Several solar power developers suggested that the primary technological challenge is the lack of research, development, equipment, and manufacturing facilities for large scale power plants. According to the Ministry of New and Renewable Energy (MNRE), in the year 2016, India’s cell and module manufacturing capacity now stands at 1212 MW and 5620 MW respectively, whereas countries like the USA, China, Germany, Malaysia, etc. are capable of multi-gigawatt production. Solar developers in India also lack the availability of solar radiation data, a critical requirement for generating solar power. The performance of large-scale power plants is site-specific and power generation is directly correlated with the data on the incidence of solar radiation, which is not available consistently in short intervals. The viability and size of solar PV projects rely on Global Horizontal Incidence (GHI). The project development, feasibility assessment and designing phases require monthly, daily and even hourly data with high confidence values. 20% of solar developers suffer from insufficient data availability, resulting in a severe setback in accurate designing for power generation.

2. Transference of energy dependency: Although the multi-dimensional benefits of adapting a clean energy source are well established globally, the idea of a complete shift from thermal power to solar power if utopian.  The challenges faced by solar developers, both technical and infrastructural, fail to deliver consistent energy outputs, capable of meeting the fluctuating energy needs from the varying demand sources in the country. For the solar industry to surpass financial and technological challenges, developers need to sustain a power demand well beyond other used energy sources, especially thermal. Since this is, within current scenarios, an impossible task, owing to the limited number of solar farms in only select states of the country, the challenge is further toughened by the inconsistency of seasonal variation in harvestable insolation. A fraction of this can only be achieved by the additional financial backup in the form of ample solar generators and storage systems, to substantiate for insufficient energy generation phases.

3. Infrastructural and associated barriers: Solar developers in India face several land and infrastructural acquisition challenges, owing to legal discrepancies from state to state. Since solar farms demand large areas of critical space, the need to acquire land in more isolated and rural areas of the country becomes a hard task. The infrastructural challenge does not stay limited to the cumbersome task of acquiring land but extends to a hefty amount of clearance requirements from various departments, resulting in unprecedented delays and even relocations. The operational viability of the solar farm is also dictated by road connectivity for transportation of technical equipment and manpower, with minimum risks and loss threats.  Natural disasters also become unforeseen sources of infrastructural challenges, affecting functionality at all stages, from inception to operational. Transmission and Distributional losses and Aggregate Technical and Commercial losses are also some of the infrastructural barriers hacking away at solar farm sustainability. India records for the highest T&D losses among various other developing counties, accounting for more than 18%, as compared to China and USA where these account for a meagre 6%. The primary reason for this is old and insufficient distribution and transmission networks, inadequate investment in the distribution system, unmanaged growth of sub-transmission and distribution systems and high pilferage.

4. Financial reliability and investment confidence: Owing to the nascent stage of solar development in India, solar developersand solar farms, suffer from the lack of a proven track record like conventional power projects, to gain the confidence in investment and financial help from the commercial banks. Although affordable capital is crucial for any energy project, it is especially essential for solar PVas the bulk portion of lifetime cost remains with the capital expenditure. According to CERC 2014, an estimated capital cost for solar PV projects was Rs. 691 lakhs/MW for FY 2014-15, implying the high capital investment demand at a very early stage. A second barrier to solar PV is the non-availability of non-recourse financing. Currently, this loan category for solar power development is almost non-existent in India, despite technical eligibility. Most developers in the country, therefore, work with full or limited funding, thus increasing financial risks and threats. Another major financial barrier is the cash-strapped situation of large-scale solar utility sector due to inadequate bankability of the Power Purchase Agreement, resulting in a high-risk stake and lack of long-term policy transparency with most solar agencies.

Leading solar power developers like Amplus Solar promises low carbon energy solutions to a multitude of solar customers. A member of PETRONAS Group Company, Amplus currently hosts a portfolio of 650+ MWp of solar assets across 300+ locations in India, making it one of the leading solar energy distributors in Asia. It provides energy-efficient solutions to help cut down your electricity bill up to 90% in less than half a decade while guaranteeing a 30% investment return with marginal risks.

Amplus Solar

April 1, 2020