With a population of nearly 7 million, Hyderabad is the sixth largest metropolis in India. Located in the southern Indian state of Andhra Pradesh, this city is seeing continual growth in its population, primarily accelerated by a booming economy and an influx of people migrating from the countryside. As a result of these changes, the city has witnessed a sharp rise in demand for commercial energy, and, indirectly, energy consumption. Since this demand is met through conventional energy production, per capita emissions of green house gases are on the rise. The “Solar Schools” pilot project is part of a German-Indian research project called “sustainable Hyderabad.” It was established to foster the sustainable development of the future megacity: Three secondary schools took part in the pilot study and installed solar photovoltaic (PV) systems on their school rooftops. The Steinbeis Centre for Technology Transfer India carried out the project together with its project partners.
The rising demand for energy has led to frequent power outages in Hyderabad in recent years and these blackouts have significantly affected teaching conditions in schools, particularly since key electronic devices such as computers, fans, and lighting systems need power to run. Yet Hyderabad enjoys lots of sunshine – anywhere from 5 to 5.5 kWh per day – and that means gaps in energy production can be filled, in part, through alternative sources. The solar project aimed to demonstrate that it is technically and financially feasible to cover a part of the schools’ energy needs through solar power production. It focused on four key targets:
Improving on the current institutional situation, the Indian government has been supporting solar energy since 1992 through the Ministry of Alternative and Renewable Energy. It introduced the National Action Plan for Climate Change (NAPCC) in 2008, effecting a paradigm shift within the Indian climate protection initiative: Solar energy development was identified as a core national objective of the initiative. In 2009, the Jawaharlal Nehru National Solar Mission (JNNSM) proposed an ambitious target of achieving up to 20 GW of power through solar energy production by 2022. Various financing plans were established to reach this national directive, for both grid-dependent and independent solar energy plants. Smaller, grid-dependent solar energy plants would be funded at the state level through fixed tariffs laid down by energy regulatory bodies. However, institutional limitations have made it difficult to implement appropriate measures in most of the states across the country, and this also holds true for Andhra Pradesh. In addition, commercial awareness of renewable energy is still in its infancy in India, with most households unable to bear the high installation costs for such systems. The pilot project aimed to prove the feasibility of small PV installations in the city of Hyderabad in order to raise awareness.
The project kicked off with the development of a financial model. The model was established through several workshops and project planning meetings. It proposed that 30% of the costs would be subsidized by the state and the remaining 70% would be covered by the schools through charitable donations and corporate social responsibility contributions made by companies.
In terms of engineering, selecting the components was a key priority for the project. The usage rate or fill factor of a PV installation determines the quality of the system. The usage rate defines the performance of the overall system, defined as the ratio between the maximum attainable output and the actual open circuit voltage. The project team selected a PV module guaranteeing 25 years of operation and an efficiency of 80% under standard operating conditions. It also included an inverter and a battery storage system, each boasting a running efficiency of 85%. Together, the system includes a solar module, inverter, charge regulator, battery storage system, data storage, and peripheral accessories such as cables and mounting parts. The PV systems were installed at the three pilot schools by qualified systems engineers and electricians. Teachers and students were involved in the installation process to give them a better understanding of how PV systems work. The output of a system can easily be monitored in real time thanks to the integrated data storage and a dedicated online portal. This also means potential errors can be quickly identified.
The work in Hyderabad showed the project team the financial feasibility of small-scale photovoltaic installations and highlighted the challenges and opportunities that arise in emerging markets. The collective experience made in terms of financing, coordinating, and managing such compact, rooftop solar installations will prove useful in making knowledgeable decisions in other megacities. At present, financial assessments show a payback period of over eleven years for a 3 kW system. This speaks for great market growth potential despite the high initial installation cost. It also clearly shows that there is true market potential, even without funding from the state.
The experience made by the solar industry in Hyderabad underscores the typical teething problems that can arise in emerging markets with inexperienced decision-makers. Despite an impressive number of new suppliers on the market, only few were interested in the project – most project developers were involved in megawatt projects. Together with Granzor Engineerings Pvt. Ltd., a project developer from Delhi, the Steinbeis Centre for Technology Transfer India ultimately found experienced project consultants to carry out the project.
The schools in Hyderabad showed great willingness to switch to solar technology, primarily for two reasons: (1) In comparative terms, the high cost of generating emergency backup power with diesel generators nearly match the long-term costs of running the solar installation and (2) the payback period is very attractive. Over the course of the project, other schools in Hyderabad also showed an interest in using solar energy.
The project team is convinced that small-scale, rooftop solar installations will begin to find broader application as the technical and financial feasibility of the pilot project becomes more well known. In addition, the government is now establishing a long-term framework for projects. The state of Andhra Pradesh has introduced a solar energy storage system for operators of installations to store excess energy. This initiative is a step in the direction of a feed-in tariff for solar energy in the near future. Plans to expand the project can be linked to state programs for rooftop solar installations to foster knowledge sharing and motivate more people to become involved. The project team agreed that one particularly important aspect of the project was the awareness it has raised for renewable energy and sustainable choices made against the backdrop of climate change. The long-term running and maintenance of the solar installations by teachers and students fosters theoretical and practical understanding of this new technology. The results of the pilot project can be shared between schools through common activities and workshops. And research institutes and companies can tap into the PV data generated by the system. The pilot project also underscored the role played by public bodies in facilitating wider use of small solar installations. However, this would mean reviewing the existing political instruments and guidelines for the industry to promote more widespread acceptance in society. Current funding offered by the Indian government is not enough to ensure long-term growth in the sector, since the financial means are limited to an unknown number of projects and it is unclear what future funding systems might look like. For the sector to grow in the long term, well-organized initiatives are needed, taking project feasibility into account along with the financial burden on public funds due to higher solar tariffs.
This case study has shown that small-scale solar installations can make a substantial contribution to clean energy production in cities – only, however, if certain conditions are met: Solar energy is only an option in countries with plenty of sun. Furthermore, business and cultural factors will determine the extent to which renewable energy can be used.