Updated: Mar 15, 2020
Multiple people reading this blog will have a moment of doubt whether the subsidy or CFA (Central Finance Assistance) provided by the government is a optional grant or everyone installing Solar PV Plant is entitled to it.
The answer is no, you have an option to let go of subsidy and install a premium quality Solar plant on your rooftop, and in-fact save more money doing so !
Let's dive into the factors which are affected in a subsided solar plant compared to a better quality PV Plant.
- Solar Modules
It won’t be wrong to say that the solar modules are worth nearly 80% of the project cost. They are the heart of any Solar PV Plant, with inverter being the brain of it. They are the ones, who take in the light from the sun and in turn produce energy. Naturally, the quality of these modules directly have an impact on the systems generation.
When we choose to avail Subsidy, the government has declared certain criteria for selecting a solar module of any make which we have to stick to. For years, whenever you had opted for a subsided Solar PV Plant, you had to use only Indian made modules and the cells in the modules could had been imported from anywhere outside India. Now, after August 2019, there is a requirement of DCR cells to be used in the project which means we can only choose to use the cells which are made in India purely. This can be interpreted as a good initiative by the government but the implementation schedule is lacking to say the least.
As there is a compulsion of using DCR cells in subsided plants, the cost of the plant increases by about 10-15% as its not feasible to manufacture the cells on as huge scale as China. The efficiency and the quality make of the modules is compromised resulting in lower energy generation.
- Installation Timeline
When we install a subsidised Solar PV Plant there are a lot of dependencies which we have on the government. Extra approvals are required from the local subsidy releasing authorities, where their inefficiency adds quite a lot of extra days and extra cost of getting these approvals into it. On an average, opting for a subsidised solar PV Plant adds upto 30-45 days to the installation time line. This means, your plant starts generation 45 days late and you miss out on the energy it could had generated during that timeline.
- Maintenance Cost
The maintenance cost for a Solar PV Plant is nearly negligible as it does not contain any moving parts. But this fact is valid for premium quality components used in plants.
- Timeline of Actually getting the Subsidy
As a customer, you only have to choose within the two options of claiming the subsidy or not. But the timeline of subsidy release from the government is a whole another chapter. The time period required to get the actual subsidy in your account can vary from anywhere from 1 year to 3 years with no fixed commitment from the government. If you consider this huge time gap, you actually loose out on the interest money which you would had earned from the bank for these years ! Same kind of subsidy program which was introduced 5 years before for the Solar Water heating schemes, and there are numerous examples where the Solar water heater installation companies went bankrupt due to the lack of subsidy release from the government. So it won’t be wrong to say that it actually hampers the financial growth of these companies resulting to hampering of growth of the whole industry.
If you factor in all of the above conditions and calculate payback on a non-subsidised Solar PV Plant, you end up saving more money when you choose to install a non-subsidised plant !
When the focus of the government and us as citizens should be adopting Solar technology for energy generation and for a cleaner environment, these policies which are made to promote such agendas - while implementation takes the program in the exactly opposite direction. Care should be taken that the policies drafted and implemented do not drain and bankrupt the companies working in this sector.
When the government is bringing on schemes to help people adopt solar by giving financial benefits to them for installing a low quality Solar PV Plant, the focus should be more on the quality of the components used. While installing Solar, citizens are not being concerned about the useful life of the plant, technology used, timeline of installation and claiming subsidy which are in-fact crucial points about whom the government fails to create awareness.