Navigating the Rise of Solar Energy: Opportunities and Challenges for Homeowners

Solar Panels for Energy Independence: The Rise of Solar Power and the Challenges Ahead

Solar power presents a sustainable, cost-effective, and environmentally friendly alternative to conventional energy sources, enhancing energy security through reliable and low-maintenance solutions. By transitioning to solar energy, consumers can significantly reduce or even eliminate their electricity bills, leading to considerable long-term savings. This shift not only supports a sustainable future but also minimizes the ongoing maintenance typically associated with solar power systems.

In this landscape, solar panels have become a viable substitute for traditional power grids, with active governmental encouragement for their adoption. One of the main attractions of solar energy is its low initial capital cost, along with its promising future potential and wide-ranging benefits. Solar rooftop installations have particularly alleviated financial burdens for households, frequently reducing electricity expenses to zero. Additionally, any surplus energy generated by these systems can be fed back into the grid, with the government providing compensation for this extra energy. This system promotes self-sustainability among consumers while contributing to the national energy pool.

Government Incentives and Challenges

The rising demand for electricity has rendered every energy unit produced essential, as emphasized by officials from the Bangalore Electricity Supply Company Limited (BESCOM). However, government incentives often fail to fully benefit end consumers, as a significant portion is consumed by Original Equipment Manufacturers (OEMs) and Engineering, Procurement, and Construction (EPC) contractors. While these entities play a crucial role in distributing solar systems, their involvement can lead to increased costs and limit the financial benefits intended for consumers.

Solar intermittency—where energy production relies on sunlight availability—remains a major challenge for photovoltaic (PV) power plants. Given that sunlight is not available 24 hours a day, particularly in regions without extreme latitudes, solar energy production naturally varies. The efficiency of solar cells, which is a crucial determinant of solar panel performance, also influences the commercial viability of solar systems. According to Chellappa Tirumalai Velu, CEO of a Bengaluru-based renewable energy company, most solar cells used today are imported, exhibiting good efficiency. However, the reliability and long-term performance of domestically manufactured cells are still unproven. Additionally, the quality of Completely Knocked Down (CKD) panel manufacturing is essential for maintaining efficiency over extended periods.

A typical home solar installation generates approximately 400 watts of power per hour under direct sunlight. In a day with 10 hours of sunlight, it can produce around 4 kWh of power. Although this output varies with sunlight exposure, the system typically requires a battery to store excess energy for nighttime use, particularly in off-grid setups. Solar power systems require minimal maintenance, with cleaning recommended every 10 days. However, many consumers overlook this task, raising concerns about panel efficiency and potentially increasing long-term maintenance costs.

Power Consumption and Solar System Requirements

On average, an Indian household consumes about 240 kWh (kilowatt-hour) or units of electricity per month, equating to roughly 8 units per day. A 2kW solar power system, generating 8-10 units daily, can meet the energy needs of many households. Meanwhile, a 3kW solar power system typically generates 360 kWh per month, or around 12-15 kWh per day. For a home requiring 15 units of electricity daily, six solar panels would be necessary, assuming each panel generates approximately 2.5 kWh of electricity each day.

The Prime Minister Surya Ghar Muft Bijli Yojana scheme, which provides subsidies for solar rooftop installations, has further incentivized consumers to adopt solar energy. According to BESCOM, there have been 611,000 enrollments from Karnataka under this scheme, including 170,000 applications from Bengaluru alone. The scheme offers Rs 30,000 per kW for up to 2 kW and Rs 18,000 per kW for additional capacity up to 3 kW, with a total subsidy cap of Rs 78,000 for systems larger than 3 kW. By January 2025, approximately 850,000 households across India had benefited from this scheme. However, the uptake in Karnataka has been relatively low, with only 207,000 of the 600,000 eligible households applying for rooftop solar systems. As reported by BESCOM, about 5,690 households have installed solar systems in Bengaluru, with the majority of installations concentrated in Bengaluru, Dakshina Kannada, and Mysuru.

Barriers to Widespread Adoption in the Residential Sector

Despite the numerous advantages of solar power, the residential sector has been slow to adopt these systems, primarily due to factors such as high initial investment, lengthy payback periods, elevated return on investment (ROI) costs linked to capital expenses, cross-subsidized consumer categories, and limited awareness. According to BESCOM officials, advancements in technology have reduced the ROI period and overall capital costs.

A significant challenge is the Gruha Jyothi Yojana, a state government initiative in Karnataka that provides eligible households with up to 200 units of free electricity per month. This subsidy diminishes the appeal of investing in solar power, as the immediate financial benefits become less pronounced.

The high capital expenditure (Capex) required for solar panel installation, coupled with limited ROI, poses a considerable barrier. Most households require between 100 to 200 units of electricity monthly, which could be met by 1- or 2-kW solar plants. However, the unavailability of plants smaller than 3 kW renders this option impractical, increasing investment costs by Rs 40,000 to Rs 50,000. Additionally, the state’s low payback rates for excess power fed into the grid further discourage solar energy adoption.

Government policies mandating the use of Domestic Content Requirement (DCR) panels, which are 20% more expensive than other available panels, exacerbate financial challenges for consumers. These panels tend to be less efficient and significantly costlier, hindering widespread solar power adoption. Furthermore, while solar panel owners are removed from the Gruha Jyothi Scheme upon installation, they are still obligated to pay fixed charges, making the system less appealing.

The Future of Solar Power: Solutions and Suggestions

When discussing the challenges and slow adoption of solar panels in the residential sector, Chellappa Tirumalai Velu highlighted that high Capex and limited ROI are the primary barriers to growth. The commercial viability is hindered by high Capex and subsidies consumed by OEM/EPC contractors.

He advised that for subsidies, DCR panels must be used, which are 60% to 70% more expensive and less efficient. He recommended that individuals consider projects without subsidies by utilizing approved, listed panels that are more cost-effective and efficient, offering higher ROI.

Another obstacle discussed by Velu is that individual houses often face limitations. In apartment complexes, homeowners cannot install solar plants in common areas. A new policy is expected soon, allowing individual owners to install solar plants in apartments, which should increase installation numbers once implemented. Regarding payback, Velu noted that the low compensation for excess energy fed into the grid makes investment unviable.

M.M. Vijayvergia, a leading solar expert at ME Power System, elaborated that policies surrounding DCR and Non-DCR solar module systems are evolving, with significant implications for cost and accessibility. DCR modules are more expensive (Rs 24-26 per watt) and less efficient compared to Non-DCR modules, priced at Rs 13 per watt. Consequently, many people choose Non-DCR panels, which are more readily available and come with fewer bureaucratic hurdles, such as the absence of subsidy application requirements. This accessibility has led many EPC players to install Non-DCR panels, often resulting in owners unknowingly claiming subsidies with minimal government oversight. Generally, a non-subsidized 5-10 kWh rooftop plant using Non-DCR panels costs similarly to or less than a 5-10 kWh system with DCR panels that includes a government subsidy.

While the rooftop solar installation scheme is beneficial, it primarily serves wealthier households with adequate roof space. Those from economically weaker backgrounds, who consume around 300 units of power, typically lack the roof space or financial means to invest in solar panels. Moreover, their homes are often surrounded by multi-story buildings, casting shadows that further limit the feasibility of rooftop solar installations.

Even when roof space is available, practical challenges arise. Installing solar panels on small or elevated structures, such as those 7-8 feet high, significantly increases costs, making it less appealing for many. Additionally, placing panels on rooftops can compromise space for other household needs, deterring individuals from adopting this technology.

In summary, the intricate policies and high costs associated with DCR solar systems, along with physical limitations of rooftop space, have made Non-DCR panels the preferred option, despite potential subsidy misuse and inadequate monitoring. Chellappa Tirumalai Velu suggested linking government subsidies to power generation rather than capital costs, incentivizing investments in high-quality, efficient products. This approach would benefit both consumers and the government by enhancing solar generation and reducing long-term distribution losses.