What is a captive solar power plant?

A captive power plant is a facility that produces a localized source of electricity primarily for the needs of the consumer or the specific business entity. The facility can be on-site or near the site, hence reducing voltage losses.

In the current scenario, it makes sense for factories and businesses to go captive solar.

What are the driving factors to set up a captive solar farm?
1)Power Grid Problems

In most of the developing countries, lack of uninterrupted power supply is a major issue. This is especially concerning for energy-intensive industries like steel, cement and steel that require a constant supply of electricity. An unreliable energy source can affect the productivity thereby incurring heavy losses.

Problems with regard to transmission losses can also be offset by installing captive solar farms close to where power is needed. Hence building a captive solar farm can improve efficiency.

2)Solar vs. Other Captive Generation Sources

Traditionally, the fuel prices for coal-based and natural-gas power plants have kept on increasing. Although coal-based captive power plants turns out to be economical, in some countries where there is a coal shortage, this might be an unfavorable option. And diesel-based captive generation has very high operation and maintenance costs.

Apart from high initial costs and minimal O&M costs, solar power allows for power generation at zero cost. Unlike diesel-based power, the decreased life-cycle cost of solar power makes it an attractive option for factories and businesses.

3)Solar Reaching Grid Parity

The rapidly decreasing prices of solar panels over the last 5 years has brought solar PV power generation costs at par with utility electricity rates at many places. This trend is believed to continue in the foreseeable future. And this has created a positive climate for implementing solar installations, with favorable government policies and effective financing options. For example, the Tamil Nadu government has imposed a minimum solar purchase obligation on commercial consumers where 6% of their power requirement must be met through solar power.

4)Meeting Sustainability Commitments

With increasing concern for the environment and climate change posing a threat, a strong sustainability commitment policy is incorporated into every company’s portfolio. Powering your facility with solar energy will enhance the company image as an eco-friendly organization.
As a measure towards producing self-reliant energy, many healthcare, pharmaceutical and IT companies are also adopting solar captive power plants.

Conclusion

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It can be said that the future of captive generation using solar PV is bright as industrial demand will continue increasing, and activities like trading through private exchanges will make it easier for captive power generators to sell the surplus for monetization. So, yes, whichever business you are in, it makes enormous sense for you to go solar by implementing a captive solar facility for yourself.