Daily Archives: June 1, 2011

Solar Solution: Solar assisted AC in India

Air conditioning in India has not been common due to the extreme demand that it puts on a notoriously unreliable electrical infrastructure. But when you think about when air-conditioners (AC) would be most used in tropical countries like India, it coincides with the time when the sun is blazing its heat in the peak afternoon. Dr Upendra Kamdar, founder of Suryashakti Systems came up with air conditioning unit that is powered in part by direct solar heat. Because units often have to fit into limited space, the systems are small because solar PV panels and batteries are not needed.

The patented hybrid system works by using solar thermal energy to further expand the refrigerant coming out of the compressor, thus reducing the compressor load and saving electricity consumed by the system. Heat is absorbed from the atmosphere and also from hot air exiting from the air conditioning system, which is usually discarded as waste heat. As there are heat storage facilities available in the system, it works during night time as well and provides 48 to 72 hours back-up during cloudy days.  The system can be effective in saving electricity consumption by up to 50% when compared to conventional air-conditioners.

Solar air conditioner schematic diagram

Mr. Dinesh Kumar Shah, the owner of Vijay Stores, a World Magazine Subscription Agency from Gujarat, India, uses a hybrid solar air conditioner.  The solar assisted AC units have been installed there for the past 1.5 years and have resulted in drastic reduction of the electricity bill. Mr Dinesh chose the hybrid systems because he runs air conditioning for 8 to 9 hours a  day, and he was confident that he’d save 50% of his electrical use. He said with the new solar AC units he’s currently saving more than Rs 30,000 (Rs 15,000 per unit) per year. A price comparison of a 1 ton AC unit shows that the solar assisted AC from Suryashakti Systems costs around Rs 18-20 thousand (~60%) more than conventional units and the resulting savings as seen by Mr. Dinesh would mean a payback period of 1.3 years. The Indian Income tax law allows an 80% accelerated depreciation in the first year for solar systems and this makes it an even more attractive proposition.

When asked about the installation and maintenance requirements, Mr. Dinesh said that installation is similar to the normal AC unit. “The system is running smoothly and is in fact much less noisy,” he added. This system has also been installed in the offices of Indian Railways.

The latest development that this company is working on now is what Mr Kamdar describes as “100% solar ductable central AC system using solar thermal system and solar chiller”. This system can cool without the use of harmful refrigerants and also provide hot water for other purposes, resulting in a 99% reduction electrical energy use compared to conventional duct base AC. The system will be commercialised after he secures funding.

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India’s Solar Mission on Track, But Needs More Props

While India’s solar mission to generate at least 1,100 megawatt of power by 2013 is on track now, private players feel the government needs to accelerate the pace of growth in the coming years to meet the eventual goal of generating 7% of the nation’s power needs.

Amit Dave/ReutersWorkers clean solar concentrator panels at a solar food processing unit in Gujarat.

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India’s Ministry of New and Renewable Energy launched the Jawaharlal Nehru National Solar Mission in January 2010 with a stated goal of developing 20,000 megawatt of solar energy in three phases by 2022 and to reach cost parity so that generating solar power costs the same as conventional power by that time.

Farooq Abdullah, India’s Minister of State for New and Renewable Energy, said he’s satisfied with the progress so far on its various projects. In the first phase of the mission, the government hopes to build capacity to generate 1,100 MW by 2013.

However, “this is not the main objective because 1,000 MW is nothing as far as India is concerned,” said Santosh Kamath, executive director of advisory firm KPMG. “Ultimately, the objective is to make solar energy a very significant contributor to India’s power and energy needs.”

The government held a transparent bidding process to allocate projects to developers and sign agreements for about 70% of the capacity it aims to achieve in the first phase. These projects are at the development stage, working on securing financing to starting construction, before they become operational. The Ministry noted that the bidding process itself has helped reduce the cost of solar power by almost 30%, as competition in the bidding process lowered prices.

“What is really good about what has happened so far is that it has kick-started an eco-system in the country,” Mr. Kamath said.

The federal government’s involvement and active interest in projects has spurred the start of new companies, expansion of existing operations, and addition of labor and new technology.

Each state also has an obligation buy a minimum level of solar power and they can substitute this with renewable energy certificates if they are short of the required amount. Gujarat, Rajasthan and a few other states also have their own separate initiatives to develop solar power.

“Our policies in the first phase have facilitated a declining trend in costs and induction of various technology options in the first phase of the Mission,” Minister Mr. Abdullah said.

“I am confident that project developers will be able to commission their solar plants well in time and that we will be able to move ahead for a scale expansion in the next phase of the Mission,” he said.

Last week, a KPMG report predicted that India’s solar energy sector needs up to $110 billion in capital over the next 10 years to meet its energy goals. However, the last three years the sector has seen only eight investments worth $100 million.

Many of the projects are small without a proven track record making it difficult for investors to put their money. It makes it even more risky when India’s banks themselves are hesitant to take on these projects. The KPMG report recommends that the fund, set up with fees levied on imported fossil fuel, be used to promote new solar projects.

Some solar energy start-ups like SuRe Energy Systems Pvt. Ltd. have resorted to raising money from friends.

Also, the KPMG study found that the state electricity boards, which are expected to buy power from renewable energy sources, doesn’t have the financial capacity to do so, and suggests that the government sponsor this as well.

KPMG recommends another focal change in the way power is consumed. Instead of power from a grid, the firm recommends that users can generate and use their own power and advocates decentralizing of solar power, especially when it comes to uses such as rural lighting systems, agricultural pumps, and telecom towers. The government is expected to spend 2 billion rupees on subsidies to such off-grid projects annually.

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China keeps top spot in Ernst & Young Renewable Energy Country Attractiveness Indices

On May 26th, 2011, Ernst & Young released the latest edition of its global “Renewable Energy Country Attractiveness Indices”, which states that China remains by far the most promising location to pursue future renewable energy business opportunities.

The report places the United States in second place and India in third, as well as stating that nations around the world are increasingly broadening the scope of their renewable energy portfolios amid “challenging market conditions”.

“It is clear that the solar sector faces both challenges and growth opportunities,” observes Ernst & Young Global Cleantech Leader Gil Forer. “This is a good time for solar companies to continue to focus on cost reduction efforts, supply chain efficiencies, risk management and capital management.”

China scores high on wind, PV

China has held top position since August 2010, and earned its highest score ever during the quarter. China scored particularly high on its wind index, but also on solar PV.

Ernst & Young states that the China’s latest five-year plan is its “greenest” to date, including a target of 11.3% of primary energy generated by non-fossil fuels by 2015.

Lower incentive levels, restricted access to capital limit wind, solar development

The report also notes a chilling effect that the global financial climate has had on renewable energy markets, noting that some sectors, such as solar, have fared better than wind or biomass.

Ernst & Young states that apart from Brazil, which increased four places, most nations have dropped slightly in scores, as the result of diminishing incentives and restricted access to capital.

CSP, offshore wind providing new opportunities

The United States remained in second place in the report, on the strength of solar CSP, solar PV and onshore wind potential. Ernst & Young states that the nation’s utility scale solar sector remains “healthy”.

The report also notes that the increasing commercial viability of different technologies including offshore wind and concentrated solar power (CSP) provide new opportunities.

Report an assessment of future potential

It is important to note that this report was not an assessment of progress in renewable energy, but rather of future business potential.

For example, the relatively low score of Denmark (#22) represents a restricted grid capacity and reduced tariff levels following installation of the greatest per-capita wind capacities in the world.

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