Of Feed-In Tariff and Net-Metering With Respect To Residential Roof Top Solar Photovoltaic Installation
Of Feed-In Tariff and Net-Metering With Respect To Residential Roof Top Solar Photovoltaic Installation
Of Feed-In Tariff and Net-Metering With Respect To Residential Roof Top Solar Photovoltaic Installation
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of Feed-in Tariff and Net-Metering with respect to Residential Roof top Solar
Photovoltaic Installation
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Abstract—The main objective of this paper is to understand the current Indian solar market and evaluate the
growth of solar power in terms of installed solar power capacity. Also, to analyze the market trends for solar
power plants and to investigate new incentive schemes for promotion of solar power against the present
incentive schemes such as Capital Subsidies and Net Metering for solar power in India keeping in mind that
India is trying to achieve the aggressive Solar Power target of 100 GW Installed capacity by year 2022.
The paper will try to analyze how Feed-in tariff will benefit the power generators via a mathematical model and
how it can attract the mass population of India towards Environment friendly Solar Power. We will analyze the
effective renumeration payable to an End user who chooses to install a roof top solar power plant at his house
under present schemes along with the FiT Scheme and we will conclude why the FiT Scheme will be able to
attract an average household to solar power.
The paper will also consider the Solar Irradiation profile of the locality of the household in question along with
the Load profile as these two will also determine how beneficial it will be for the Owner to shift from present
Incentive schemes to Feed-in Tariff Scheme.
Keywords:- Feed-in Tariff (FiT), Net-Metering(NM), Photovoltaic (PV), Return Of Investment (ROI),
Levelized Cost Of Electricity(LCOE), Power Distribution Company (DISCOM), Ministry of New and
Renewable Energy (MNRE), National Renewable Energy Laboratory (NREL).
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Date of Submission: 07-08-2018 Date of acceptance: 23-08-2018
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I. INTRODUCTION
SOLAR energy is a renewable source of electrical energy. The use of solar power has increased
considerably in last few decades for generation of electricity as the non-renewable sources are limited and not
environment friendly. In the list of renewable sources, wind and solar power lead as solar irradiance and wind is
more easily available. Many techniques and methods are implemented on solar technology, making it stable and
efficient.
The Total production of Renewable Energy has been increasing with a steady rate and by 2017-18 it has reached
to 99,203GWh for the whole year. The Energy Yields from various Renewable Energy sources in India for last
4 Financial Years are shown in figure 1 [32].
Other
Wind
Small Hydro
.
International organization of Scientific Research 49 | P a g e
Analysis of Feed-in Tariff and Net-Metering with respect to Residential Roof top Solar Photovoltaic ..
Figure 2 shows the brake up of Total Renewable energy installed capacity in India. Solar energy contributes for
22% of the total installed capacity [32].
8%
22%
0%
14%
56%
The Governmentof India has been committed to growth of solar power sector for quite some time now
and good amount of tax payer’s money is spent on development of solar power. The National Budget of 2018
has allocated INR 2.17 billion for the good cause[41]. The Department ofNonconventionalEnergy Sources,
Government of India, which started in 1982, to promote the production of nonconventional power in India
Further the Jawaharlal Nehru National Solar Mission (JNNSM) introduced on the 11th Jan 2010 focused mainly
on solar power. The Central and state governments have avail attractive incentive schemes in order to promote
investment in solar power sector.India is alsoplaying an Important role in the International Renewable
Community with France in formation of International Solar Alliance (ISA) which has 121 members from the
tropical regions.
A. Capital subsidies
This is one of the most basic incentive scheme which can cover both grid connected as well as stand-
alone systems. Under this scheme the Government will subsidize a part of capital that is invested for the
installation of a solar power plant. The Ministry of New and Renewable Energy in India subsidize 30% of the
capital cost of solar installations while remaining is available in the form of a soft loan [39].
Major disadvantages with Capital Subsidies are that it puts entire financial burden on the tax payers.
Capital subsidies are based only on the installation cost of the plant and they are independent of the actual
energy yield over time or the capacity of the plant in question over all the Capital subsides can only ensure the
installation of the plant not its efficient operation.
B. Net-metering
Net-metering applies only to the Grid Connected PV systems such systems may or may not have
battery back-up installed according to Net-metering the power generated and injected back into the grid has the
same economic value as the power supplied by the grid. A bi-directional Energy meter or two separate meters
may be used to calculate the net flow of energy [1].
Net-metering is presently in use all over India for all grid connected Power Generators cum consumers
with few exceptions, it is very simple and easy to implement [29] as the power supplied back to the grid is
subtracted from the power supplied to the consumer and the billing is done over the net power supplied to the
consumer. Although Net-metering is viable option for reduction in Net-payable bill [13] [17], but it is not very
profitable from power generation prospective as buy back rates remains quite low in case the total generation of
power is higher than the total consumption of electricity thus it is not able to attract too many investors
especially at the house hold level as the installation cost remains very high and ROI period remains quite long.
C. Feed-in Tariff
Under this scheme the DISCOM companies are under obligation to buy Solar Power generated at a
tariff rate determined by the relevant authorities [23] which is normally higher than the average cost of power
supplied to the end users, thus the financial burden of promoting solar power is no longer on the tax payers but
on the end users of electricity [12].
The Feed-in tariff rate can be controlled via Power Purchase Agreement (PPA), normally it is kept
higher for smaller installations in order to promote decentralization in power generation [16] and reduce
transmission and distribution costs and reduce the effects of adverse weather conditions in total renewable
energy production [3]. Feed-in tariff is successfully implemented in many countries like Germany, France, Italy,
Spain, Japanetc [20].where it was utilized as an effective tool to increase investments into solar power [19]. The
only drawback with Feed-in tariff is that it will result in increase of average electricity cost to the end users.
D. Other Schemes
Apart from the above methods the government may use various other methods to lure investors into
solar power like allocation of land at subsidized ratesfor development of solar parks and soft loan, accelerated
depreciation and other incentives for roof top installations [8].
India is the home for the largest solar power parks in the world The Ministry of New and Renewable
Energy lists 45 different solar power parks approved all over the country with a total capacity of nearly 26.5
GW till June 2018 power among with the GujratDholera Solar Park which has the highest capacity of 5 GW
[39]. The problem with such parks are that they require massive amount of land and infrastructure and cause
centralization in power production.
Apart from this The Government of India has started few other schemes which promote the installation
of roof top plants like subsidies for Roof top grid connected plants by Solar Energy Corporation of India such
plants do not require massive land or infrastructure as they are already connected to the grid further such
installations improve the decentralization of power, reducing the transmission and distribution cost and losses
maintaining stable grid operation [21].
Despite (weighted average) prices having declined from INR 12.16/ kWh when the National Solar Mission
(NSM Batch 1) started in December 2010 to INR 6.72/kWh in November 2014, shortly after the new targets
were announced, solar power was seen as being a long way off from cost competitiveness.However, the
optimism around the potential of solar power is not unanimous, with concerns being raised around the
sustainability of the aggressively low solar bids, especially as bids went as low as USD 3 cent (INR 1.99)/kWh
in Dubai and Chile. Recently ACME Solar India has made bid of 2.44 INR/kWh Bhadla Solar park in Jodhpur,
Rajasthan [33].
Figure3 below shows the declining trend in solar bids in India, comparing the lowest solar bids from the
beginning of the National Solar Mission, till now.
Power Output from Photovoltaic system will be the product of inverter efficiency with total DC power
generated from the panel.
Where
PkWp = Peak Power ratings in kWp.
PVarray(t) = PV array power output (watts)
Imp = Rated current (Amp.)
Vmp = Rated voltage (Volt.)
Computation of Total Bill as per the domestic tariff rateswhich are given at the website of Rajasthan Electricity
Regulatory Commission [37].
Electricity charges (E) = total consumption (kWh) x applicable tariff rates
Fixed electrical charges (F) = total consumption (kWh) x 0.40
Fixed monthly charges (S) = applicable as per consumption slab
Total bill (T) = Electricity charges (E) + Fixed electrical charges (F)
+ Fixed monthly charges (S)
T=E+F+S
Feed-in Tariff Renumeration
A Simulink model is designed based on above equations and billing structure to calculate the FiT and Net-
Metering Benefits for four different locations the solar irradiation profile for these places is taken from National
Renewable Energy Laboratory [38] website.
Figure4 shows MATLAB/Simulink model designed for solar power generation, Feed in Tariff calculations, load
input and Net metering system. PV system outputs are taken as input for both Feed-in Tariff and Net-Metering
system and load data is considered from Indian Solar Energy department website [36], average of that is taken
for calculations. This structure measures the tariff income of PV generation.
Figure 4 Model to Calculate total electricity charges FiT income and Net-Metering income
The PV System calls the Variable Radiation data from the workspace tocalculates the PV Out from the
panel and gives out put in kW. It also generates the kWp i.e. the max rating of the power plant installed along
with the total Energy generation from the PV rooftop panel.
The Fit System uses the Output Energy generation from the PV block and calculates the FiTrenumeration
under different Fit Rates for four different cities Jaipur, Jaiselmer, Kota, Barmer.
The Load Centre calls the Load Data from the workspace and use the same for calculation of total Energy
consumption. It also calculates the total amount of bill payable for the consumption.
The Net Metering system takes PV out data and the Load Data as input in the form of Matrix in order to
calculate the shaved power out, net energy consumption and the total bill amount payable for the net energy
consumption.
Figure 8 Plots Load, PV generated and Shaved Load for Kota Region.
Figure 9 Plots Load, PV generated and Shaved Load for Jaipur Region
Figure 10 Plots Load, PV generated and Shaved Load for Jaisalmer Region
Figure 11 Plots Load, PV generated and Shaved Load for Barmer Region
Comparison of load profiles with and without PV inclusion and total power generated from PV is represented in
figure 8 to 11 respectively. It shows that PV generation fulfills the extra demand of load and add-on to current
supply effectively supplying power back to the grid during the peak sun shine hours of the day.
Table 2 Total payable bill amount under Net-metering and various FiT rates.
Net payable bill amount (INR)
City Jaipur Barmer Kota Jaisalmer
Without PV 672.2 672.2 672.2 672.2
Net-metering 143.47 109.61 144.53 158.73
FiT Rate 6.0
193.84 146.04 195.33 215.39
INR/kWh
FiT Rate 6.5
153.98 102.19 155.59 177.32
INR/kWh
FiT Rate 7.0
114.12 58.35 115.85 139.26
INR/kWh
FiT Rate 7.5
74.25 14.5 76.12 101.19
INR/kWh
FiT Rate 8.0
34.39 -29.35 36.38 63.12
INR/kWh
Table 2 shows the Net Payable bill amount for the Domestic roof top solar installation where the row 1
shows the total Payable in case the consumer does not have a PV Installation at all. The negative billing amount
indicate that the consumer cum generator will receive money back from the DISCOM.
Table 3 shows the total benefits achieved by the household under various Feed-in Tariff rates and Net-Metering
due to the solar roof-top installation.
Table 4 shows a comparative analysis of the FiT and Net-metering scheme negative amount imply that Net-
metering is more beneficial under that particular condition. A clear trend is visible of higher benefit with higher
FiT rates.
Figure 12 gives a graphical representation of difference between Feed-in Tariff and Net-metering benefits it
shows that the Barmer region is benefited the most by FiT scheme as the region has higher solar irradiance
during the month.
150
100
50
0
FiT Rate FiT Rate FiT Rate FiT Rate FiT Rate
-50 6.0 6.5 7.0 7.5 8.0
INR/kWh INR/kWh INR/kWhINR/kWhINR/kWh
-100
Figure 12 Graphical representation of Cost benefit comparison of different FiT rates with Net-Metering
future, there is a chance that investors recalibrate their returns on investment, and in turn, target lower returns.
This would further bring down the cost of financing.
VI. CONCLUSION
As the resultsshows that if the Feed-in Tariff rates are higher than average electricity cost the
consumers will be benefitted more if he choose to install roof top PV systems. Consumers living in
cities/locations with higher solar irradiance will be benefitted more and thus can survive with lower Feed-in
Tariff rates compare to other cities.
Higher Feed-in Tariff rates for smaller installations can attract average population to opt for Roof top
solar installations thus covering the gap between the target set for 2022 and the total installed capacity till date.
The Policy makers need to understand the strength of mass population of India. Proposed Feed-in
Tariff rates and buyback assurances for small roof top installations can be the game changer for solar power
India.
As per the Census of 2001 and 2011 [38] if 25% of Indian population decides to install solar power at
their homes with average power capacity of just 1 kWp India will be able to meet the 2022 targets without
installing a single large-scale power plant.
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