Is Solar A Viable Investment Option?

India has become a hot-selling solar market despite people still facing several major issues. People are interested in installing solar systems but are unaware of its full potential and usually get scared away by minor operational issues or huge investment decisions. The major criticisms/ problems that people in India have against solar are:

 

i) People think it is better to open a bank account and have your money deposited there, rather than investing in solar.

 

ii) People do not have the required space to install a solar system. Majority of people in India stay on rent, especially in large cities.

 

iii) Some people say that their electricity bill is low and hence it does not make financial sense to invest in a solar system as the payback period will be longer.

 

iv) People want such a solar system that will not only reduce their electricity bills but will also recharge the batteries or run appliances at the time of power cuts.


Despite these problems, India has witnessed an impressive rate of solar installations. In this blog we will discuss the thoughts that cross peoples’ minds before and after installing solar systems. It will help you in making a firm decision whether solar is beneficial for you or not.

 

Here is a table that is prepared after analyzing both residential and commercial sectors. It is important for people in solar business and also owners to be aware of this data.

 

solar panel estimate for home and business owner

Residential Solar System

home solar panel installation

A solar system (with battery system) of up to 10kW in capacity that is installed at homes qualifies to be a residential solar system. The investment would be somewhere around Rs. 1,00,000 per kW. The electricity bills of a home is generally Rs. 1,000 per month.  Installing a solar system in such an establishment could result in savings of Rs.8,400 per annum. The investment is expected to have an RoI (payback period) of ~10-11 years and return on investments will be around 8%.

Major Challenges for Homeowners

3 major challenges for home onwers

Homeowners have three major reasons that they are not installing solar systems on their homes. Let's see...

 

1. Budget Constraints

solar is still costly

Funds for investing in a solar system is usually the biggest headache for a homeowner. Arranging around Rs. 1,00,000 per kW for installation is not a small task for a common man. He would prefer to install other necessary facilities/ equipment rather than installing an alternative source of energy. But they need to be fully aware of its benefits.


2. Double Expectation

double expection

As mentioned above, people have double expectations from a solar system, i.e. they want such a solar system that will not only reduce their electricity bills but also expect all their electrical appliances to work during load-shedding.


3. Net Meter

net meter

The net metering has always remained a big issue. The net metering option allows an owner to claim credit for the energy he sends back to the grid. Though it sounds very simple and exciting, that is not always the case. People face issues in procuring the net meters and those who have say that it is only good in papers, but reality is totally different.

 

Commercial Solar System

commercial solar panel installation

A solar system (grid-connected) of up to 25kW in capacity that is installed at hospital, factory, offices, resort, school, colleges, showrooms, cold storage, petrol pump, hotels, workshops etc. qualifies to be a commercial solar system. The investment would be somewhere around Rs. 50,000 per kW. The electricity bill ranges around Rs. 25,000 per month.  Installing a solar system in such an establishment could result in savings of Rs.14,000 per annum. The investment is expected to have an RoI of ~3-4 years with return on investment of around 28%.

Major Challenges for Business Owners

3 Major Challenges for Business Owners:

Similar to homeowners, there are also some challenges with business owners too. We understand three basic problems with them: 

 

1. Installation Space

solar panel installation space problems in commerical space

The commercial establishments have a limitation of area that is needed for installation of solar. Many of these establishments are also on rent, where the owner is not free to make such installations. Also space crunch is a major issue in cities.


2. Return on Investment

return on investment is not meeting in solar

Business owners expect a payback period of average 4 years but they just focus on the solar panels. They will buy solar panels of good brands but will not focus on other components like inverters, BoS, etc. So if any other component malfunctions, the performance of the whole system will come down thus negatively impacting the Return on investment.

 

3. Durability

solar panel durability test

Business owners focus only on one component say solar panel and ignore other important component of the system ie. mounting structure. Imagine if the base is not strong how will the system work. You have spent a huge amount of money only on panels but tried and saved a few bucks on mounting structure. If this structure fails to support the solar panels all your money will be wasted.

Feasible Solution for Home Owner

solar solution for home onwers

 

#1. Buy Solar System on EMI

solar panels on emi

A homeowner can opt for taking a loan (for home improvement) for solar on EMI to reduce his financial burden. Few banks in India offer such loans.


#2. Install Hybrid Solar System

hybrid solar system

A few companies have started making a hybrid solar system which might help customers to solve their double expectations. But it is still not guaranteed.

 

#3. Discover Self Solution

net metering process

Getting net metering option is not feasible through third-parties. A customer should himself find out about net metering options at his own electricity bill office. There are online portals for some states like UP, Haryana, Bihar, etc. which might also be of help to customers. Net metering is available for most states but is different for all states and rules also keep changing.

    Feasible Solution for Business Owner

    solar solutions for business onwers

     

    #1. Customized Installation

    customized solar panel installations

    A commercial/ business owner can opt for wall mounted solar panels to solve their issue of space constraint. Or, he can discuss with the engineers for any other viable customized options for best performance.


    #2. Analyze Everything

    everything must knows about solar

    As we have already discussed above, that business owners should put their focus on the entire solar system rather than just a simple component because any issue in just one part can take the whole system down. If they focus on all parts they will have no complaints about their returns.

     

    #3. Install High Quality Products

    high quality products

    They should install high quality products or products of reputed companies for their entire solar system, be it panels, or inverters or mounting structure, etc. Any lapse in one product can adversely affect the working and returns from the solar system.

    How to Install the Solar System?

    solar panel installation basic guide

    To save your mind from unnecessary worries and problems, follow this five-points checklist before installing a solar system at your home or workplace.

     

    #1. Subject Expert Matter Guidance

    solar professional suggestions

    Though much of the information is available on the internet, it is better to seek advice from a SME. He will guide you properly regarding your specific issues regarding your location, area, budget, type of system, brands, etc. You will save yourself a lot of headache if you have the reassurance of a subject matter expert.

     

    #2. Right Product Selection

    choose right products

    Always go for the best brands and the right products for your system because solar entails a massive investment. Don’t let your hard-earned money go down the drain by not choosing the right products.


    #3. Scope of Work

    scope of work in solar installations

    Be clear and discuss with the system providers and installers about their scope of work to avoid any last minute arguments.

     

    #4. System Performance

    solar panel perfomance

    Buy the products only once you are satisfied that the product is right for you and its performance is good. Also keep an eye on the performance of the system even after installation. Nowadays, many apps are available to monitor the performance and you can connect with your system provider in case of a lapse or issue.


    #5. Installer Portfolio

    installer portfolio

    Please be fully satisfied that you have chosen the best installer in your area to do the job. Check the installer’s history and details of any franchise to which he is associated, if any. You can also go look for other installations that he has done in your town/ city. If there is any lapse in the installation process, your whole system might just crumble.

    Conclusion

    We should be always cautious before making any type of investment. We always think and weigh the pros and cons even before buying a small thing so some extra caution before big investment decisions won’t hurt. Remember, to check the risks, returns associated with the investment, time and your personal conditions before making this investment. Solar technology has become increasingly popular given its efficiency and rapidly falling cost. A handful of people in India have installed solar for the purpose of an investment. But in the near future when electricity meters become prepaid, solar will also be installed for investment purposes commonly.

     

    हिंदी में पढ़े: सोलर एनर्जी सिस्टम में निवेश करना कितना लाभदायक?

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    Comments

    Ashok kumar Sharma - October 6, 2020

    I am interested this Business

    Muthukumar - September 30, 2020

    Iam interested in solar business

    Ritesh Thakate - September 25, 2020

    I m interested in business

    Ritesh Thakate - September 25, 2020

    I m interested in business

    MICHAEL.G - September 25, 2020

    I want to know more about investment and what is the minimum amount of investment
    and how is the return

    Manish rajput - September 25, 2020

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    Shubham Kumar Thakur - September 25, 2020

    Respected Sir,

    As per our last conversation I mentioned you about myself and my course background through my attached resume, and my priority for the project will be from Technical aspects of Generation and Distribution and its Marketing Concepts. I am expecting to have some field knowledge, experience and research under the guidance of your organisation. I sincerely hope the hands-on practical experience that would help me to explore new knowledge and to fulfil my career goals in the field of Solar Energy.

    In terms of stipend I am expecting an amount that would be helpful to my stay and I want to explore and be stable in this field I have very much Interest in this field If you give me chance I will do my best.

    Past experience in Projects

    Worked at Solar Radiation Resource Assessment (SRRA) station, Ranchi, under the guidance of Dr S. K. Samdarshi (Head, Department of Energy Engineering)

    Worked at M/s Power Tech Consultants (start up by Bibhu Charan Swain “Accredited Energy Auditor” as summer intern in the department of “Energy Auditing and Managing Solar Projects” under the project I have done Energy Audit and Lighting Audit of various companies like Hindalco, BPSL, JSL, HEC, KTPS to estimate their whole power consumption and suggest them energy efficient measures to conserve energy in all manners. In this whole work I have also done project of marketing of Energy Efficient Devices to HEC from EESL I was assigned the project to explore different possibilities to produce energy from renewable sources. I have also done marketing of solar project to The C V Raman Institute of Engineering Odisha after FANI (Disaster) and successfully installed it.

    I have also worked on making a report for Solar PV installation at my university’s campus using PVsyst simulation software, I have beginner level knowledge of PVsyst and eQUEST.

    I would be able to join by the start of October.

    Given a chance I am confident that I will make a meaningful contribution to the best of my ability. It would be a great opportunity for me to work in your prestigious organization and gain practical experience of corporate environment.

    Thank you for taking the time to consider this application and I look forward to hearing from you in the near future.

    Regards

    Shubham Kumar Thakur
    Pursuing Integrated M.Tech in Energy Engineering – 2016-2021
    Department of Energy Engineering
    Central University of Jharkhand, Ranchi- 835 205 India
    : +91-8299290612

    Dr Shanaz Latif - September 24, 2020

    Would like to install rooftop solar system in our residential building.

    Athar Shafi - September 24, 2020

    Need information regarding off grid solar power system

    Harbans Singh - September 23, 2020

    Dear sir
    I am interested in to take dealership of your company in two district of Rajasthan Ganga nagar & Hanumangarh.Pl tell me the procedure .
    Thanks & regards
    Harbans.singh

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