India’s solar energy sector: Challenges, opportunities and the way forward
Solar energy is the most abundantly available and one of the cleanest energy resources that humankind has known for a long time. With the benefits of solar energy and its advantages, many countries worldwide are on the path to attaining success with energy generation using solar systems.
According to the Indian Renewable Energy Development Agency Limited (IREDA), India is endowed with abundant solar energy capable of producing 5,000 trillion kilowatts (kW) of clean energy. over, India gets 300 sunny days a year in most parts of the country and solar insolation of 4-7 kWh per square meter per day.
If harnessed efficiently, this energy can substantially reduce the dependence on fossil fuels and reduce the carbon emissions involved in energy generation. It will also reduce the energy demand gap across the country, including in remote areas where the energy supply is limited.
In this article, we will understand the current scenario of solar energy usage in India, the challenges, and how it is changing the energy sector for the future.
National solar potential
Today India is one of the biggest importers of energy in the world, and about 85% of the total energy and fuels needed are imported from several other countries leading to high expenditure on energy resources amongst all other expenses.
With the scope to harness solar energy, there is a huge potential to meet the demand avoiding the dependency on imports.
With about 300 clear and sunny days in a year, the calculated solar energy incidence on India’s land area is about five quadrillion kilowatt-hours (kWh) per year (or 5 EWh/yr). If harnessed for a year, this energy will surpass India’s total fossil fuel energy reserves.
Many states in India have already recognized and identified the opportunity solar energy can offer in addition to being an endless power source. In the future, solar energy will greatly meet India’s energy demands in multiple sectors like electricity, automobile, manufacturing, and commercial.
Theoretically, a small fraction of the total incident solar energy (if captured effectively) can meet the entire country’s power requirements.
Technologies and use cases of solar energy in India
Solar energy has already touched millions of lives in India by meeting their cooking, lighting, and other energy needs in an environment-friendly manner.
While there has been a visible impact of solar energy in the Indian energy sector in the last few years, the generation of these resources has not even met 10% of the country’s total demand.
Some of the technology that can revolutionize the energy sector are:
- Solar PV Technology: Solar photovoltaic (PV) cells convert solar light directly to electricity. The setup is directly installed on land or on top of homes where there is direct exposure to the sun and is used to power lighting and other electrical appliances we use daily.
- Solar Thermal Technology: In this case, solar energy is used as a heat source for direct use and to generate steam for electricity production in residential buildings.
- Floating Solar Technology: This type of solar energy generation is similar to solar PV, however, the panels are set up on floating platforms on water instead of land. This installation is most helpful when the population density is high and the land area is limited.
The application of solar energy is widespread and diverse. Some applications include solar electricity, solar water heating, solar heating, solar ventilation, solar lighting, portable solar, solar transportation, etc.
Why Go Solar?
Not only is solar power energy-efficient and renewable (meaning it is wonderful for the environment) but it will save you money overall. Solar heat can be used to dry crops, warm livestock buildings, and even power your own personal home!
Solar energy can also help you to increase your own self-reliance. If you live in a rural area, you might often be worried about energy cuts or blackouts. When using solar this is not something you need to be worried about.
What is the USDA REAP?
Through small business innovation research, agricultural producers found that solar power is not only a great way to save money, but it is a great way to generate clean energy to power our farms. Finally, after enough research and development, REAP was born.
The REAP is a program put on the United States Department of Agriculture. REAP stands for Rural Energy for America Program, and is offering grants and loans. Essentially, this program is a government incentive that is designed to help small and rural businesses, as well as farmers, obtain energy efficiency upgrades and install new solar systems.
According to Energy.gov, in 2015 alone a total of 63 million in grants and loans were awarded through the USDA REAP program. Whether you are a large farming operation or a small business in a rural area, you may be able to apply.
Funding for State and Local
These grants and loans will be given out based on need and ability to prove your business will utilize the renewable energy systems.
- Energy grant: REAP provides solar panel grant funding for up to 25% of new solar installation projects.
- Loans: This program provides loan guarantees covering up to 75% of the total energy efficiency improvements made to your business.
The amount of the funding will range anywhere from 5000,500, all the way up to a maximum of 500,000 for renewable energy systems. For improvements to already existing energy-efficient systems, there will be a rebate amount ranging from 450,500 to 250,000.
What Do You Need To Start A Solar Business?
Any business requires a business plan and capital to get started. But a solar business needs a few more things to run successfully. The solar business is divided into two categories. Product based and Service based. And both types of business require the following things to get started.
Technical Knowledge
You must have knowledge about how solar energy works and how to use solar products. You can get the training from recognised institutes.
Sales Team
You will need a sales team to help people understand the need of using solar products and services.
Marketing Plan
Although many people are aware of the benefits of using solar energy, some people need to know how they can use solar energy for a sustainable lifestyle.
Capital
This one seems obvious but let us tell you that some business ideas need more capital than others. And some ideas might not require any investment. We have discussed all of it below.
Now let us dive into the solar panel business ideas.
Solar Business Ideas You Can Start In 2022
The solar business has two categories- product-based and service-based.
Product-based solar business requires capital, land, and manpower. And it gives a high return on investment. Service-based solar business requires low investment but is profitable also.
And both types of business require technical knowledge and skills. So, let us find out which solar business idea is more suitable for you.
Product-based Solar Business Ideas
Solar Product Manufacturer
You can manufacture and sell solar products. Apart from traditional solar panels, you can sell other products like solar gadgets, rechargers, batteries, home lighting, etc.
You must have a solid business plan and marketing strategies. Manufacturing solar products also require high capital investments. But looking at the high demand for solar products, it is one of the lucrative business ideas for 2022.
Solar Product Distributor
If you don’t have the financial capacity to be a manufacturer, you can sell products by being a distributor. There are so many well established solar bands in the market. You can tie up with them and choose to sell their products in your area.
You will be required to do a market survey before starting a distributorship. A proper market survey will ensure a high return on investment. As a solar distributor, you can sell products like solar panels, home lighting, batteries, so on. And for that, you need to invest as low as two lakhs. Also, it is one of the most profitable solar panel business ideas.
Solar System Integrator or Installer
If you are a technical person, you can choose to become a solar system installer. You will help customers by installing solar systems as per their requirements. You will need to tie up with solar companies that provide solar systems. You must also conduct a market survey to find out which area has a demand for solar systems.
As a solar installer, you will need a team of technical people, and all of them should be certified professionals. Because installing a solar system is not a one man’s job.
The initial investment to be a solar system integrator is fifty thousand to two lakhs. And you get paid on a per-project basis.
Solar Farm Business
Solar farm systems are the same as home solar systems. Solar systems installed in a home provide energy to a single home, whereas solar farms can provide energy to a community.
To start a solar farm, you must own a piece of land enough to set up a solar system. And the initial investment for system installation.
These are the product-based solar business ideas that require more capital than service-based solar businesses. If you don’t have the financial capacity to start a product-based business, we have more options for you below.
Servicing Solar Products:
The last but one of the most important solar business ideas within small investment horizon is setting up a business which will provide maintenance and repairing services to the solar products.
If you are planning to start solar panel installation business then here are the facts and figures:
- Total Investment Cost: It depends on the scale of your business but normally you can start with an investment of INR 5 lacs to 10 lacs.
- Types of Solar Panels: There are different types of solar panels from three to three hundred watts and the price of each varies accordingly.
- Franchise: If you want to sell the solar panels only, then you can take up a franchise of the big solar panel producing companies which is available against an amount of around 1 lac in India as of now.
- Marketing: Once you have taken the franchise of the solar panel manufacturing company now you can market your products and since you are taking a franchise of a renowned brand, people already might be aware of the solar products of this company so your marketing expenses won’t be much.
- Appointing Solar Panels and Power Consultant: For the installation purpose, you would need to appoint employees who are experienced in the installation of the solar panels. There must be consultant and workers who will do the field job according to the instructions provided by the consultant.
Solar plates manufacturing a business opportunity
In India, the main government aid or initiative was taken in the field of solar energy production and business is the “Jawaharlal Nehru National Solar Mission” (JNNSM) which aims at producing 20 thousands Megawatt of solar energy by the end of 2022. This can cover twenty million square meters of area for collecting solar energy. The initiative has been divided into three phases.
There is another scheme or Government Yojana – Solar Energy Subsidy Scheme which helps in increasing the reach of the use of the solar panel. It doesn’t help the manufacturers but the users of the solar panels. It subsidies the energy consumptions of the people who have solar panels installed in their home.
SECI Project is another one which is for the production of the rooftop solar panels on a large scale basis. It is for the channelization of the government aids in the right direction for the proper manufacturing and installation of the solar grids across the rooftops of the people who want them.
If you want to start a solar business, then this is the perfect time to invest the money in it as the market is growing every day and the demands are growing with the depleting non-renewable energy resources and growing importance of renewable energy resources.
FAQS
There are many benefits to solar power, including that it is a renewable resource, it is carbon-neutral, and it does not produce any harmful emissions. Additionally, solar power can be used to generate electricity, which can then be used to power homes and businesses. Solar power is also relatively inexpensive, making it a great option for those looking to save money on their energy bills.
The key components of a solar power system are the solar panels, inverter, and batteries.
The cost of solar power varies depending on the size and type of system, as well as the location. Solar power systems can range in price from a few thousand dollars to tens of thousands of dollars.
The sun emits a type of energy known as light. When this light reaches the solar panels on your roof, the panels absorb some of this energy and convert it into electricity. When your solar panels are producing electricity, you have what is known as “net metering.”
The cost of solar panels and other equipment needed to harness solar power can be prohibitive for some people. 2. Solar power is not available at night, and cloudy days can also reduce the amount of power that can be generated. 3. Solar power plants can take up a lot of space, and they may not be able to be built in some locations due to land restrictio
The benefits of solar power for businesses are many, but include reducing or eliminating utility costs, saving money on energy bills, and offsetting carbon emissions. Solar power can also help businesses to be more sustainable and reduce their environmental impact. Solar power is a clean and renewable source of energy, and businesses can often take advantage of tax incentives and other financial incentives when they install solar panels.
Solar power is more expensive than traditional forms of energy. Solar panels may not work as well in cold weather. They may also not produce as much energy during the winter when there is less sunlight. Solar panels can be damaged by hail or high winds.
The main challenge of solar power for businesses is the high initial investment. Solar panels can be expensive, and businesses need to ensure that they will receive a return on their investment. Solar power can also be unreliable, as it is dependent on weather conditions.