At Solar Mango, one of our research activities has been to understand the use of rooftop solar for reducing diesel consumption, especially for industrial and commercial enterprises.

On the face of it, it looks like a no-brainer:

Diesel based power costs Rs. 15-20 per unit, while rooftop solar power costs less than Rs. 5 per unit (Solar Mango insists it is even less than Rs. 4)

Rs. 5 vs. Rs. 20. If solar could replace 100% diesel, I could be saving 75% of costs of power generated from diesel. Could there be an easier decision to make?

Well, it turns out that diesel vs. solar calculation is more complicated that a simple, straight line arithmetic of Rs 5. vs Rs. 20.

There are three reasons for this:

  1. The most important reason has to do with the efficiency of diesel generators with load factor – if the diesel genset is operating at load factors of less than 30% (which it will if it is used indiscriminately in conjunction with solar power), the genset’s efficiency drops down so precipitously that you are better off not using solar. Let me just give an example: At a load factor of 25%, a diesel genset may give just 1 unit of electricity per liter of diesel consumed (vs 3.5-4 units per liter at full load factor). That is, under this scenario, a unit of power costs Rs. 60 (cost of one liter of diesel). Aren’t you better off just using diesel without solar?
  2. The way current diesel gensets operate, there is a good chance that reverse current could flow from solar panels into the diesel genset during excess electricity generation from solar. This can have a harmful effect on diesel genset giving rise to significant maintenance and part replacement costs. Thus, you cannot have as much solar power as you want to act in parallel with diesel genset. This has to be estimated judiciously keeping in mind the loads that the diesel-solar hybrid will cater to.
  3. Thirdly, you do not have unlimited amount of rooftop space. In fact, in one of the rooftop solar installations that Solar Mango worked on, for the connected load of 380 kVA for the client, we realized that the optimal amount of solar capacity would have been about 130 kW, but their rooftop (about 8,000 of shade free area) permitted only about 80 kW.

Sure, points 2 and 3 do not directly affect the math of Rs. 5 vs. Rs. 20, while point 1 surely does. Still, these two points do reduce the extent of diesel reduction that would be possible if these constraints were not there.

Of the three points, I would say the first point is the most critical when it comes to relative economics of solar and diesel. Under ideal conditions, the blended diesel-solar power could cost as little as Rs. 7-8 per unit. But if not designed well, it could cost higher than what it would cost if you were running just the diesel genset alone!

All right; if designed well, what are the likely reductions of diesel consumption possible through the use of solar?

To answer the above question, we took data from existing rooftop solar installations, as well as talked to diesel genset companies to get efficiency vs load factor data. Using all these, the following are the general inferences:

  • In most cases where a single genset is used, one can expect diesel reductions of up to a maximum of 25%, and more likely in the range 15-20%. This will result in an overall power cost reduction of 10-12%, from a base scenario of just diesel based power generation
  • In cases where multiple DG sets are used, if intelligent hybrid inverters are used, it is possible to get a diesel reduction of up to 40%, and a cost reduction of 22-25%

So, if you are expecting a 75% cost reduction from base scenario, you are likely to be disappointed. Whether a 10-20% cost reduction from base scenario is good enough or not is a decision you have to make.

But that is reality for you.

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