Key Concept

1.1 Why is there so much talk about solar?

Why is everyone talking about solar power more than any other renewable energy source?

Here’s why: Any place, any size and in double quick time.


  • Solar power plants can be put up anywhere, well, almost anywhere – on the rooftop, on the ground, on car parks, on greenhouses, in large gardens, even on lakes and canals…you get the idea. The only big requirement of course is that you need enough sunlight to grace that location!
  • It is a truly distributed source of power. Thus, it can be generated where it is consumed, resulting in little loss in transmission and distribution.
  • It is modular, and hence you can have solar power plants that are very small or very large. Both work equally well and equally efficiently!
  • Low Cost – Solar power is becoming cheaper every year, and is for all practical purposes cheaper than grid power for business sectors in most parts of India. Suffice to point out that some of the earliest solar power plants put up over 30 years ago are still humming along nicely!
  • Low Maintenance – Solar power plants do need some maintenance, but it is fairly low.
  • Quick Installation – A solar power plant can be installed in a fairly short time-span. Even a MW scale power project can actually be implemented in less than 3 months!

Stuff to Remember

Solar is by far the most important renewable energy the world over, and it will remain so for the foreseeable future.

1.2 If solar power is so wonderful, why has everyone not put up solar panels on their roofs?

Solar power is a damn good idea, but it is not a magic bullet.

Let’s tell you something that will surprise you: As of early 2017, less than 1% of Indian homes and factories/commercial establishments have solar panels installed.

If there are so many benefits from solar power, why have not many more installed solar power?

Here are the reasons why solar is not a magic bullet:

  • Requires sizable installation area – Solar panels require sizable area to generate enough electricity. Thus, the amount of electricity your rooftop area can generate might not be enough for all your power requirements – this is especially true for commercial and industrial units.
  • High capital costs – Solar power plants also cost a significant amount in upfront capital costs. While this cost has come down significantly in recent years, it is still in the range of Rs 50-60 per Watt in 2017 for rooftop solar installations – a substantial amount for many businesses (for large installations, it costs about Rs 4.5-5 Crores/MW).

Not a complete grid replacement – Only in very few cases can solar power completely replace the grid; for all practical purposes, solar power can only be a complementary power source, especially for industries and commercial establishments.

So, like anything else in the world, solar power has its limitations.

At the same time, mark our words – starting 2017, you will see many, many more companies investing in solar panels. This is mainly owing to the attractive economics of solar power and a parallel increase in the cost of grid power. The savings that can be made from installing solar power have just about started getting tempting for commercial and industrial sectors.



Stuff to Remember

With its high area requirements, significant capital costs and infirmness, solar power has its limitations. Despite these, expect a significant adoption of solar power starting 2017 by the industrial and commercial sectors.

1.3 What are the business models associated with solar power plants?


Sell to yourself, another company or to the government.


For any business keen on having solar power, the first question they should ask themselves is: Who will buy/use the power?

The answer to this question will pretty much define the business model for the power plant.

A solar power plant can provide benefits through the following avenues:


  1. Sale to Utility: Utility usually refers to state owned electricity distribution companies (discom) or large central power companies like NTPC. In this model, you can sell power generated from the solar plants to the discom/central power entity at fixed rates for as long as 25 years through power purchase agreements.

  1. Sale to Third Party: You can sell power to third party private companies. This is also typically done through a power purchase agreement with the buyer.

    • Houses: Rooftop Solar Can Supply Most of Your Needs – For many houses, rooftop solar has the potential to contribute up to 80% of their total electricity consumption.

Offices & Commercial Establishments: 10-40% – For offices and commercial buildings, rooftop solar has the potential to contribute up to 40% of their electricity consumption. For an IT company in Chennai that Solar Mango assisted in implementing a rooftop solar power plant, the contribution from solar worked out close to 35%.Self-Consumption: If you have an energy intensive business, you can own solar power plants and use the energy generated to offset your monthly electricity bills.


Stuff to Remember

The power from your solar power plant can either be consumed by your own company or it can be sold to an outside entity, which could be a private company or government utility.


1.4 So how do these solar power systems work?



Here’s some quick physics: The energy in sunlight is contained in small energy packets called photons. So, just remember: Photons = Small packets of energy.

Solar panels convert the energy contained in the photons to electricity.


Such a phenomenon where photonic energy is converted into electricity in fact gives this type of technology its name – Photovoltaic, or PV for short.



So, when you hear the term Solar PV, rest assured it refers to the same solar panels you are familiar with. The electricity generated by solar panels is in the form of direct current (DC).

However, almost all the electrical equipment we use (Fans, lights, TV…) run on Alternating Current (AC). Conventional grid power is generated as AC.

So you need an equipment called inverter to convert the direct current (DC) generated by the solar panels into AC.

Enter the inverter.

The inverter converts the DC power from the panels to AC power, which is in turn fed to your appliances, and is no different from the AC power you get from the grid.

The above set up pretty much completes the core of a basic solar power plant. All other components are mainly for additional support.


Stuff to Remember

Solar panels absorb energy from sunlight and generate DC electricity. Once the inverter converts this electricity into AC form, it is no different from grid power.

1.5 How are rooftop solar plants different from large ground-mounted solar power plants?

As you probably know already, solar power plants can be installed either on rooftops or can be located on the ground.

Rooftop solar power plants are typically of small to medium capacities, ranging from a few kWs to usually less than a MW. Ground-mounted projects, on the other hand can run from 1 MW to 100+ MW.

Conceptually, the large, ground-mounted solar farms are not any different from relatively smaller rooftop solar power plants.

They both generate solar power in a similar manner, and in both cases, the solar power gets converted from DC to AC by an inverter.

However, the main difference between rooftop solar and solar farms is in the way the solar power generated is used.

In the case of rooftop solar, the power generated is mostly consumed at the same site, with any small excess exported to the grid.

In the case of most ground mounted solar farms, the electricity generated is not used at the site, but instead, is transmitted through the electricity grid to be used in many different places.

Thus, ground mounted solar farms, especially large solar farms that are 100+ MW in size, are a centralized form of power generation, not very different from a coal or nuclear power plant in this context.

A rooftop solar power plant, on the other hand, is a distributed form of power generation, in which the power that is generated is consumed at, or very close to the point of generation. In this case hence, the electricity does not need the grid to be transmitted elsewhere.

Let’s make it easy to remember:

Rooftop Solar = Distributed + Power Consumed at Site

Solar Farms = Centralized + Power Exported to Grid



Stuff to Remember

Power generated in rooftop solar power plants are usually consumed at site; power generated from large solar farms is usually fed to the grid.

1.6 Can a solar power plant provide electricity at night?

Given that solar power is generated only when the sun shines, it is obvious that solar panels cannot generate power at night.

There is still a way that you can use power generated from sunlight at night. How?

If you use batteries to store the solar power generated during the day, you can use that energy during the night. Thus, technically, you are using solar power to provide electricity at night. Note however that extensive use of batteries can significantly increase the cost of solar power. A 2 hour backup can increase the cost of solar power by 20%; a battery back-up of 4 hours or more could increase your solar plant’s cost by about 50%.

There’s another way you can “virtually” use solar power at night. This can be through what are called Net Metering schemes provided by your state electricity utility. Under such a scheme, any excess solar power you generate during the day and export to the grid can be adjusted against your consumption of grid power, even if it is at night.


Stuff to Remember

The only way you can directly use solar power at night is through the use of batteries. But batteries, owing to their cost, are not economically viable except for small installations.

1.7 Can I run my factory entirely on rooftop solar?

It really sounds cool to generate our own power and be absolutely independent of the grid, doesn’t it?

But hold on, not so fast.

For factories and commercial establishments, the feasibility to run entirely on rooftop solar is still lower, and should be considered only in the rarest of cases.

So, while it is unlikely that our homes or factories will run solely on rooftop solar power in the near future, here are some estimates on how much solar can supply.


  • Houses: Rooftop Solar Can Supply Most of Your Needs – For many houses, rooftop solar has the potential to contribute up to 80% of their total electricity consumption.
  • Offices & Commercial Establishments: 10-40% – For offices and commercial buildings, rooftop solar has the potential to contribute up to 40% of their electricity consumption. For an IT company in Chennai that Solar Mango assisted in implementing a rooftop solar power plant, the contribution from solar worked out close to 35%.
  • Factories & Manufacturing Units should not expect much from rooftop solar alone. For factories and other units that use heavy machineries and large amounts of electricity, the contribution from rooftop solar alone might be quite insignificant.
Consider the case of the pharma company that Solar Mango assisted. Even though they had a large rooftop area of 8,000 sq.m, the contribution of solar power from their rooftop worked out to less than 5% because of the massive power consumption by the factory – about 21,00,000 units per month!


As a commercial or industrial unit, you might be disappointed that you cannot get a majority of your electricity demand from rooftop solar.

But despair not. You can have solar contribute considerably more for your power demand by going beyond just your rooftop. This is what we deal with in Question 2.4.


Stuff to Remember

Rooftop solar power alone is unlikely to contribute all the power you need for your office or factory. For commercial facilities, it could contribute up to 40% in select cases. For factories with high power consumption, rooftop solar alone can contribute only less than 10% of total demand in most cases.

1.8 Can I use solar power to reduce diesel consumption from generators?

Backup power generated by diesel gensets cost a heck of a lot – somewhere in the vicinity of Rs 15 per kWh. Is it possible to utilize rooftop solar power plants to reduce the amount of diesel consumed?

Yes, you can use solar power plants on your rooftop in sync with your diesel generators and reduce diesel consumption.

The exact amount of diesel reduction benefit you achieve is a function of many factors. But be aware that massive reductions in, or elimination of, diesel consumption is unlikely.



Rooftop solar power plants can reduce diesel consumption up to 40% under ideal circumstances. Under more likely conditions, you can expect to achieve a diesel use reduction of about 20%.


In one of the unique consulting projects Solar Mango did for a solar/diesel hybrid, the client used the rare combination of solar panels + batteries + diesel genset, and that too for a sizable rooftop solar power plant of about 100 kW. Actual use data suggest that they were able to reduce diesel consumption by almost 30%.

Such a reduction for the client was possible owing to two reasons: One, they had a large battery bank, and two, their rooftop solar power plant contributed almost 35% of the total electricity consumed by the company, a relatively large percentage for the commercial/industrial sector.

Data from other installations show a more modest diesel reduction in the range of 15-20%.

While on the topic of solar/diesel hybrids, it is important to optimally design the solar power plant.

Of special importance in the design is sizing of the solar power plant. The sizing should be done such that the diesel genset can operate at high efficiencies most of the time and to ensure that a few other electrical emergencies are prevented.

It is recommended that you go only with those EPCs/system integrators who understand this design concept well for the solar/diesel power plant.


Stuff to Remember

Rooftop solar power plants can work with diesel generators and can potentially reduce diesel consumption by 20-40% for commercial establishments, though their contribution is likely to be lower for factories.

1.9 Can I use solar panels along with solar water heaters?

Just because they both contain the word solar and both of them are present on rooftop, solar panels should not be confused with solar water heaters.

Solar water heaters are used to provide heat, usually hot

Solar panels, on the other hand, generate electricity and not heat.


water for a bath, and in some cases, steam for cooking.So, solar power panels and solar water heaters are used for completely different applications. Using one has no bearing on the use of the other, except perhaps for the area available on your rooftop.


Stuff to Remember

Solar power plants/solar panels have nothing to do with solar water heaters. The only thing common to both is the sun!

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