Kazi Zaman, a volunteer at the Bangalore Apartments' Federation, has been tracking the renewables industry for many years now and has served on the Board of Directors of a leading Indian wind turbine manufacturer. He gave a detailed session on Roof Top Solar system and its economic and environmental impacts.

1. © 2012 Veda Corporate Advisors Private Limited
11
PRESENTATION TORooftop Solar : The eco-friendly way to
cut your electricity bill
Kazi Zaman
Neighbourhoods of Tomorrow
8th September, 2018

2. © 2012 Veda Corporate Advisors Private Limited
22

3. 3
Rooftop solar: An introduction
Why solar?
• Zero fuel cost
• Integrated with existing systems
• Optimal use of unutilized roof
• No transmission losses
• No moving parts – low maintenance
costs
• No air / noise pollution

4. 4
What makes rooftop solar compelling today?

5. 5
Solar energy for residences: Why now ?
• Modules are semiconductors : Price fall is similar to that of chips
• Regulatory changes such as net metering have allowed solar to grow
beyond niche off-grid applications
Installed
capacity in
India: 2.6 GW to
23 GW in 4
years

6. 6
Regulatory easing: Bottlenecks eased
• Solar power is infirm
• And unfortunately storage (i.e., batteries) is expensive
• While panels last 25 years, batteries don’t
• Introduction of net metering is a game changer
• Eliminates need for expensive storage
• Disadvantage of infirm nature of solar power removed
• Intra-day surpluses are exported to grid
• Bi-directional meter records usage and export – billing is on net
units consumed

7. 7
Win-win: Eco-friendly as well as wallet friendly
• Compelling long term economics
• even without subsidy / concessional financing / tax breaks
• Project IRRs in the mid teens and above
• Payback periods are reducing. Now 5 ½ to 6 years approx.
• Regulatory framework becoming more customer friendly
• BAF is driving efforts at the highest level in Karnataka
• Eco-system of vendors and partners rapidly emerging to
offer long term support and maintenance contracts

8. 8
Economic models for roof top solar

9. 9
Economic constructs available today
Capex Model Opex Model
Location of plant Apartment rooftop Apartment rooftop
Ownership of plant RWA RESCO / IPP
Capex for plant RWA RESCO / IPP
Responsibility for
O&M
O&M vendor selected
by RWA
O&M vendor selected
by RESCO
Performance risk is on RWA RESCO / IPP
Economic benefit Entirely to RWA RESCO shares benefit
with RWA; upside
retained by RESCO

10. 10
Capex Model: An illustration
• Broad economics for a 75 kWp plant
• Capex of ~Rs 50L
• Generation of ~1.05 lakh units per annum in year1
• Net savings in electricity bill of ~Rs 8.75 L per annum
• Payback period ~ 6 years; IRR ~ 16-19 %
• Pros
• RWA typically earns 4.5% pa net of taxes on corpus; 17% IRR is
outstanding in comparison
• Concerns for RWA
• Large upfront outlay
• What if something goes wrong? Who will fix it?

11. 11
Opex / RESCO Model: An illustration
• Plant economics assessed by RESCO
PPA signed with RESCO for 100% offtake of generated electricity as a
rate lower than utility rate
• For same 75kWp example, generation of 1.18 lakh units per annum in
year1 on same roof
• Net savings in common area electricity bill of ~Rs 2.5 L per annum
• Pros
• No capex cost or project risk
• Guaranteed savings
• Per unit inflation typically much lower than utility inflation
• Concerns for RWA
• Bulk of upside accrues to RESCO partner
• Give up opportunity to take advantage of further fall in panel prices
in future

12. 12
Hybrid models for risk mitigation
• Capex model with robust generation guarantee
• Pro: Mitigates risk in early years
• Concerns: Complex contracts; cost of guarantee will be priced in
• RESCO model with buyback option
• Pro: Gives RWA a chance to change their mind later
• Concerns: Complex contracts; cost of option will be priced in

13. 13
Process
Step 1
•Technical feasibility
Step 2
•Choice of economic model
Step 3
•Seek quotes from vendors
Step 4
• Implement project

14. 14
BAF initiatives on Rooftop Solar
• Generating awareness amongst RWA’s
• Helping RWAs shortlist and select vendors based on
appropriate economic construct
• Engaging with authorities at the highest level to ease hassles
in paperwork and process

15. 15
THANK YOU!
Go green! Go solar! Save money!