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Indian utility-scale solar company SolarArise claims to offer investors long-term, cash-generating assets and anticipates advancements in energy storage technologies to enable 24-hour clean power at competitive prices. In a freewheeling chat with EFY’s Yashasvini Razdan, SolarArise’s Co-founder Tanya Singhal divulged interesting details about the company’s business model, challenges, technological innovations, and future plans of contributing to the country’s renewable energy goals.
Q. What does SolarArise do?
A. SolarArise is focused on building large solar plants to generate and supply solar power directly to the national grid. It secures land with ample sunshine, procures solar modules, raises funds for equity and debt, constructs the plant, builds lines for power evacuation to the nearest substation, and operates the plant for 25 years with an intent to reduce the cost of solar power generation through improved technology over the years.
Q. What business opportunity does SolarArise present to investors?
A. SolarArise offers investors a chance to own long-term, cash-generating assets. Approximately 95% of the investment is made upfront in the capital-intensive solar business, with minimal annual operational and maintenance costs. The generated revenue significantly contributes to a reliable cash flow, making it appealing to investors such as pension funds or life insurance corporations. These investors, seeking annuity income with a long-term horizon, value the consistent, double-digit annual returns that solar investments can provide over 10, 15, or even 25 years.
Q. Solar panels are said to have less efficiency. How does that compare with traditional energy generation sources?
A. The concept of efficiency in the context of solar energy is fundamentally different from traditional energy generation sources. In conventional sources, efficiency matters because you deal with finite resources burned or extracted from the earth. With solar energy, the sun is always there; if you don’t harness it, you simply miss out on its potential. The real question of efficiency in solar energy depends on the returns on the investment made in solar infrastructure. Are we generating the expected amount of electricity annually for the capital invested? It is about maximising the power generated from an existing, ever-present source. The more we invest in solar energy, the less we rely on inefficient, polluting sources like coal. So, in solar energy, efficiency is more about investment rationale than resource limitation.
Q. What is scheduling, and why is it necessary?
A. Government mandates compel solar producers to schedule power output for the next 24 hours in one-hour slots with predictions every 15 minutes, balancing energy supply in the grid. A permissible deviation threshold exists, and significant underproduction or overproduction may lead to penalties. This practice, applicable to solar and wind energy, is called forecasting and scheduling.
Q. Are IoT devices or sensors used in your solar energy projects?
A. Sensors in solar plants differ from those in smart grids, being plant-specific and focusing on individual solar module performance. Each module has sensors measuring and transmitting data about received sunlight and direct current (DC) power generation. These sensors are part of control systems within the plant, with a primary focus on internal sensor functionality.
Q. How does placing all these sensors in a plant impact the monitoring and efficiency?
A. A solar plant, spread across a vast area, makes fault detection akin to finding a needle in a haystack. Sensors at each stage locate deviations in power generation, offering precise measurements. They generate a loss diagram, detailing power losses from input to final output. Optimising and examining this diagram ensures consistency with engineering predictions, aiding in identifying faults for repair and increasing efficiency.
Q. Do you see the advancements in EV and automotive batteries leading to potential solar power storage space?
A. Yes, for storage to be truly revolutionised, you will need it at three ends. One, at the plant end, where electricity is generated, to dispatch electricity as and when required. The second storage is needed at the grid end in the substations with a corpus to store excess energy and release it during peak demand periods. Improved battery technology at the consumer end, i.e., the third end, allows consumers to store excess energy and use it as required.
Q. Is there any technology that connects the national grid to battery stations and schedules the power supply?
A. Yes, there are numerous technologies for this. Scheduling is a smaller aspect of the larger technological innovation happening. Large battery banks for power storage are being built to offer renewable power during peak demand, which may be outside the sunshine/wind hours. The idea is to provide clean power on demand, especially during high-cost periods. Other technologies include finding ways to store energy more effectively, cheaply, and efficiently to minimise electricity loss. Another critical area is enhancing battery life for multiple cycles, which significantly lowers the overall storage cost.
Q. Do you need any specific technology or a partnership for scheduling?
A. Partnerships with time-of-day power experts are crucial for accurate predictions of solar power generation, estimating sunlight and grid power needs. In our solar plants, ‘digital twins’ simulate the energy conversion process via a detailed, virtual model of solar modules. This enables precise forecasting by mirroring the actual asset, identifying areas for improvement. Efficiency gains may involve examining losses from solar modules to transformers. The digital twin learns from past production data, directly impacting revenue for cash-focused investors.
Q. What is the scale of investment you put into all of this technology?
A. The scale of investment varies. Initially, it primarily involved the upfront capital investment in modules and other components. Nowadays, much of this technology comes built with the modules we purchase. For example, there is something known as string inverters, where each module is tied to an inverter equipped with an inbuilt chip for measurement. Therefore, for us, it becomes a part of the capital investment needed to buy the product. I estimate that it accounts for less than 5% of the system’s cost.
Q. Are all the components being acquired domestically or by importing?
A. While certain tenders are designated for domestic procurement, imports become necessary due to the limited availability of materials. The domestic production capacity for solar modules is much less than the demand, necessitating international imports. To discourage reliance on foreign sources when domestic capacity is available, the government has imposed a basic custom duty, making imports 44% more expensive than domestic purchases. Yet, importing becomes the only option once the domestic supply is fully used. This situation is expected to change in the next few years as significant investments are being made in domestic manufacturing, helping bridge the demand-supply gap and allowing for more local production.
Q. Where does India stand in the renewable energy generation ecosystem at a global level?
A. India, now the fourth-largest in renewable energy generation, has achieved significant progress in the past decade; initially not even ranking in the top 10. The government aims to have 50% of its power from renewable sources by 2030, and with ongoing efforts and observed adoption trends, India may achieve this target even before 2030.
Q. What are the primary challenges in achieving this goal, and how do you propose to face them?
A. India’s renewable energy challenges have evolved. From 2010 to 2015, the focus was on proving solar power viability, now cost-effective and attracting substantial investment. The current challenge is providing 24-hour clean power, addressed by energy storage solutions like traditional batteries or pumped hydro storage. Solar power costs ₹2.5 to ₹3, while storage is at ₹6 to ₹7 per unit, making 24-hour solar slightly costlier than fossil fuels. Despite a 90% reduction in battery pricing over a decade, the remaining 10% is still considered expensive. More efficient and affordable storage (around ₹5 a unit) could provide continuous clean energy at competitive or lower prices than fossil fuels. Minor challenges include payment security and ensuring timely payments for supplied electricity.
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