Replacing Diesel with Solar
A complete guide to installing solar PV for backup power
![]() Pages :250 Updated : April 2011 |
If you are keen on setting up a captive solar PV power plant for your business, especially as a replacement for diesel, this comprehensive report will be an indispensable guide.
This report contains comprehensive inputs and in-depth insights on:
- Captive solar PV technology and components
- Government incentives and regulations
- Inputs on capital and operational costs and financial scenario analysis
- Case studies for those businesses that already use solar for captive power
- Financing options
- Vendors, component suppliers and system integrators
- List of solar PV captive power plant systems all over India
This report has been developed by EAI. EAI is India's leading renewable energy consulting and business intelligence firm. Founded by professionals from IITs and IIMs, EAI is today considered a critical catalyst and partner for the Indian cleantech industry.
Frequent unavailability of power from the grid is a critical problem faced by Indian industries, and with the Indian industry growing at a hectic pace, this deficit is even more harmful.
According to a recent study carried out by the Manufacturers' Association for Information Technology (MAIT) and US-based power distribution solutions provider Emerson Network Power, India Inc lost Rs 43,205 crores (about $10 billion) in 2008-09 due to power outages. The revenue loss due to power failure grew at an aveerage of 11.9% in the past five years.
Other industries facing a similar problem include textiles, cement, paper, sugar mills, ceramic industries etc. These industries are energy intensive in nature and thus power costs form the most critical cost component.
Many large companies have resorted to having their own captive power plants. At present, there are about 2,759 industrial units using captive generation power plants (both renewable and non-renewable) with a capacity of 1 MW and above. Many smaller businesses and commercial institutions rely to a large extent on diesel for backup power. To the latter and to some extent to the former, solar PV based power production could be an attractive option. This report will help you set up a captive solar PV power plant for your business or company.
The Replacing Diesel with Solar report is a comprehensive guide to setting up solar based captive power plants for industries and commercial buildings. Apart from providing details on setting up captive power, the report also provides inputs on how solar based captive power can be segmented according to the needs: back up type; solar captives for quality power; solar captives for multiple benefits and captives for reducing costs of production of electricity.
Presenting the Replacing Diesel with Solar Report
The Replacing Diesel with Solar Report was prepared by EAI (www.eai.in) as a response to the need in the market for a detailed report that provides a detailed picture on solar based captive power generation.
For industries and companies both large and small keen on setting up captive power for their power consumption, the report will provide insights on the following:
- Steps involved in setting up an offgrid solar PV power plant
- Key pre-requirements for setting up a captive solar power for your premises
- Capital and operating costs
- Returns - especially when compared to diesel - IRR, RoI, payback period, scenario analysis
- Financing options
- Land requirements
- The complete value chain for setting up a solar PV for offgrid, captive consumption
- Companies and entities involved in the setting up of a captive solar power plant
- Case studies of existing off grid, captive solar installations in India and key takeaways
What will you know after reading this report?
- Why should I go for solar based captive power?
- What are the key advantages of using solar PV as a replacement for diesel?
- How much solar PV capacity do I need for my electricity requirements?
- How much will it cost to install a solar PV captive system?
- What are the operational and maintenance costs for a solar PV power system for my premises?
- What are the key things I should look out for before installaing a solar PV system?
- What are the mistakes I should avoid?
- How much space will I need for the captive PV installation?
- Should I use solar as a backup power or as a mainstream power source?
- Will I be able to depend completely on solar energy for my day time operations?
- If I operate night shifts, will I need a storage system (battery) for my energy needs?
- Can I sell my excess energy to the grid?
- What are the components of the solar PV system?
- What is the lifetime of the system and its components?
- Am I eligible for availing government incentives?
- Can I install a hybrid captive system (mix of solar and wind OR solar and diesel)?
- When should I consider using a diesel generator along with my solar PV system?
- What are the disadvantages and bottlenecks in using solar PV for offgrid power?
Who Will Most Benefit from this Report?
- Companies with unreliable grid supply having significant dependence on diesel for backup power, and are keen on setting up a reliable power system with attractive long term cost benefits
- Industries and commercial buildings that have enough roof top or ground space
- Companies and businesses that are keen to show their green credentials while at the same time solving a critical problem of backup power source
Insights and Intelligence, Not Just Information
Compiled by a diverse team of experts, with experience in industrial fields, the Replacing Diesel with Solar is the first report that provides in-depth analysis and insights on this important field. It uses innumerable data and information from a wide variety of expert sources and market studies, and distills these inputs and data into intelligence and a roadmap that you can use.


The EAI team would like to talk to you to understand how we can help you in your Solar PV efforts. If you are interested in purchasing the report or getting our help, talk to
us now.
Sumukhi Sreevatsan
Email : sumukhi@clixoo.com
Mobile : +91-9962140666 (India)

- Quick links
- List of Contents
- Presenting the Comprehensive Report for Captive Solar Power
- What will you know after reading this report?
- Who Will Most Benefit from this Report?
- Insights and Intelligence, Not Just Information
- EAI India Cleantech Intelligence Series
- About EAI
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Pages : 250
Updated : December 2011
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Key Take-aways from the Report
- While solar PV based captive power generation is in its infancy, there are specific market segments which have clean pain points that could be addressed well by solar PV. As a result, these segments are likely to have a much higher adoption of solar PV for captive power generation.
- Solar PV is most cost competitive as a replacement for diesel-based power production.India has about 7000 MW of diesel based power production in MW scales alone, with hundreds of thousands of diesel gensets used in diverse commercial locations – from over 250000 mobile telecom towers to over 5 million diesel based agricultural pump sets, and with tens of thousands of companies and industries using it for power generation from small kW to hundreds of kWs.
- Grid-tied solar PV systems are the most common systems used in captive power production in India. The use of diesel – solar hybrids is growing; however, the growth in use of wind-solar hybrid systems has much slower than expected, owing primarily to performance issues with micro wind turbines.
- It costs about Rs 2.5 lakhs per kW for setting up a captive solar PV system with battery storage; a system without battery storage costs about Rs 2 lakh per kW.
- There are a number of established companies that can take up turnkey implementation of captive solar PV systems; in addition, there are dozens of small players operating in this market, with this number expected to increase dramatically in the near future.
- The National Solar Mission has a special section of incentives for offgrid solar power production, with incentives in the form of capital subsidies. In addition, captive solar power plants can also avail accelerated depreciation benefits.
- Set as a replacement for diesel power generation, captive solar PV power plants provide attractive equity IRRs and equity payback periods, under typical financing patterns.
- Until now, the most preferred route for captive solar PV has been the corporate financing route. However, with the expected large scale adoption of captive solar PV power plants, it can be expected that both project finance and asset finance routes to come into vogue as well.
- There are over a hundred installations of small scale solar PV based captive power generation, adding to about 2.4 MW of total capacity. Learnings from the existing power plants are only emerging and one can expect significant learnings from these as their numbers increase within the next few years.
EAI’s research has been bought by prestigious companies from India and worldwide. Customers for our research services include:
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Reliance Industries Limited, India
Emerson Electric
Shell, Netherlands
Marubeni, Japan
Mitsubishi, Japan
Fortune 500 Companies
Saudi Aramco
iPLON GmbH, Germany
Association of Biotechnology Lead Enterprises
National Renewable Energy Laboratory, USA
US Army
Indian Railways
Ministry of Foreign Affairs of Denmark
Others
1. Captive Power in India
1.1 Introduction
1.2 Captive Power Plants in India
1.3 Why Solar for Captive Power
1.3.1 The Business case for CPP Using SPV
1.4 Attractive Market Segments
1.4.1 Large Industrial Facilities
1.4.2 Large Commercial Buildings/Facilities
1.4.3 Communication Sectors
1.4.4 Water Pumping
1.4.5 On-shore and Off-shore Oil & Gas
1.4.6 Desalination
1.4.7 Remote Monitoring Stations
1.4.8 Warning Signals
1.4.9 Cathodic Protection
1.4.10 Lighting
1.4.11 Direct-Drive Applications
1.4.12 Refrigeration
1.5 Solar Power Vs Diesel Generator
1.6 Key Bottlenecks
Tables
- All India Captive Power Plants of Industry (1 MW and above)
- Wind Power Plant Installed Capacity and Generation at Captive Power Facilities
- Renewable Energy Installed Capacity and Generation by Industry Industry-wise Installed Capacity of Captive Power Plants (1 Mw & Above) in MW
2. Technology Options for Captive Solar PV
2.1 Introduction
2.2 Stand Alone PV systems
2.3 Grid-tied Captive Power Plant
2.3.1 Grid-Interactive Only (No Battery Backup)
2.3.2 Grid-Interactive With Battery Backup
2.4 Hybrid System
2.4.1 Solar Photovoltaic-Diesel Generator Hybrid System
2.4.2 Solar Photovoltaic-Wind Hybrid System
2.5 Technology Option Prevalent In India and Future Trends
Figures
- Direct-coupled System
- PV System with a Battery Bank
- Grid-interactive PV System without Battery Backup
- Grid-Interactive with Battery Backup
- A Schematic of a Stand- alone Hybrid System
- Solar Photovoltaic-Wind Hybrid System
3. Setting up Solar Captive Power Plant in India
3.1 Steps involved in setting a Captive PV Power Plant
3.2 Steps Involved in Setting up Hybrid System
3.3 Key Requirements to Set Up a Captive Power Plant
3.3.1 Essential Components
3.3.2 Optional Components
3.3.3 Default Components
3.4 Key Factors to Consider
3.5 Indian Companies and Entities Involved in Setting up of a Captive Power Plant
Tables
- Comparison of PWM and MPPT charge controllers
- Types of Batteries
- Trackers and Sensors
- Inverters
Figures
- PV-hybrid System Block Diagram
- PV-Generator Mix Plot for Omaha
- Relationship between the Current and the Voltage during the 3 Phases of the Charge Cycle
4. Policies, Regulations & Incentives
4.1 Introduction
4.2 Government Incentives and Policies
4.2.1 Captive SPV and the NSM
4.2.2 Electricity Act
Tables
- Central Financial Assistance & Eligibility
- Envisaged Deployment across the Application Segments
- Other Off-grid Small Solar Thermal Systems
- Wind-Solar Hybrid Systems
5. Economics of Captive Power SPV Plants
5.1 Introduction
5.2 Capital Costs and Breakups
5.3 Results of the Financial Model
5.4 Scenario Analysis
Tables
- Cost break up of a 100 kW solar captive system – without batteries
- Cost break up of a 100 kW solar captive system – with batteries
- Government subsidies
- Costs and Financing Pattern
- Performance of Solar PV System --
- Results of the Financial Model
- Summary of Returns from Cost Savings
- Equity IRR, Project IRR, Equity Payback Period, Project Payback Period, for Different Capex and Diesel Price Escalations
6. Financing of CPPs
6.1 Introduction
6.2 Project Finance
6.3 Asset Finance
6.4 Corporate Finance
6.5 Most Likely Routes for Financing of Solar PV CPP
6.6 Nodal Agencies that Support Renewable Energy Financing in India
6.6.1 IREDA
6.6.2 Power Finance Corporation Ltd
6.7 Financial Institutions that Fund RE Projects in India
Tables
- Project Debt Financing for Renewable Energy – Highlights
- Financial Institutions that Fund RE Projects in India
7. Next Steps to be taken by a Solar PV Captive Power Developer
7.1 Introduction
7.2 Preparing Prefeasibility and Detailed Project Reports
7.3 Meeting Government Departments
7.3.1 Lists and Contact Details of Government Departments (SNA) in Various States
7.3.2 Central Government Relevant Department Details and Contacts
7.3.3 Other Associations for Solar Energy in India
7.4 List of Integrators of Solar PV Captive Power System
Tables
- List and Contact Details of State Nodal Agencies (SNA) in Various States
- Central Government Relevant Department Details and Contacts
- Other Associations for Solar Energy in India
Figures
- Next Steps to be taken by a Solar PV Captive Power Developer
8. Solar PV in India – Industry Status and Trends
8.1 Introduction
8.1.1 Introduction to Alternative Energy Sources
8.2 Solar PV Technology
8.2.1 Solar PV – Crystalline Solar Cells
8.2.2 Solar PV – Thin Film Solar Cells
8.2.3 Solar PV - Concentrating Photovoltaic
8.3 Solar PV Market Status and Trends
8.3.1 Market Share of Thin Film Photovoltaics
8.3.2 Solar Photovoltaic in India – A Snapshot
8.4 Solar Energy Potential in India
8.4.1 Regional Potential for Solar Power
8.4.2 Current Solar PV Scenario in India
8.4.3 Future Solar PV Scenario
8.4.4 Solar PV Future Contribution in Indian Electricity Supply
8.5 Status of Solar PV Technology in India
8.5.1Solar Cells and Solar PV Production
8.5.2 Foreign Trade of Solar PV
8.6 Prominent Solar PV Power Projects & Companies in India
8.6.1 Solar PV Power Projects Installed
8.6.2 Proposed Solar PV Projects
8.6.3 Solar PV Projects in India – News and Updates
8.7. Key Challenges to Growth of Solar PV in India
8.8 Brief Highlights of Solar CSP and Solar Thermal for Heating and Drying
8.8.1 Solar CSP
8.8.2 Solar Thermal for Heating & Drying Purposes
Tables
- Solar Photovoltaic in India – A Snapshot
- The top 5 districts with the best solar irradiation in Gujarat
- The top 5 districts with the best solar irradiation in Rajasthan
- The top 5 districts with the best solar irradiation in Madhya Pradesh
- Renewable Energy Installed Capacity in India
- India: Projected Installed Capacity (GW)
- India: Projected Installed Capacity (GW)
- National Solar Mission Targets
- India: Projection of Solar Electricity Generation Capacity under the Energy Revolution Scenario
- India: Projection of Solar Electricity Generation Capacity under the Reference Scenario
- Trends in Production of Solar PV Cells and Modules (MWp) in India
- Application of Solar PV Cells (MW) in India – Sectorwise
- Foreign Trade of Solar PV
- Imports of Solar PV Cells
- Exports of Solar PV Cells
- Grid-tied Solar PV Power Projects Commissioned
- 5 MW Solar PV Power Projects Approved by the Central Government under Phase I of NSM Scheme
- Rooftop and Small Solar Power Plant Projects Registered for Generation Based Incentives under Phase I of NSM Scheme
- Solar PV Power Projects Coming up in Gujarat
- Developers Selected for Establishing Solar Power Projects by Rajasthan Government
- Solar PV Project at Kolar
- Highlights of Solar CSP
Figures
- Classification of Energy Sources
- Solar Energy Technology
- Historical Evolution of Technology Market Share and Future Trends
- 2010 and 2011 Regional PV Market size Forecasts
- Thin-Film Vs. Crystalline Solar Panel Production
- Annual mean daily global solar radiation in India
- Solar irradiation data for Patan
- Solar irradiation data for Jaisalmer
- Solar irradiation data for Neemuch
- Trends in Production of Solar PV Cells and Modules (MWp) in India
9. Case Studies of Indian Use of Captive Solar PV
9.1 Captive Solar PV Systems – Experience of L&T, Chennai
9.2 Captive Solar PV Systems – Experience of SSN College of Engineering, Chennai
9.3 Stand-alone Solar PV Installation in India
Table
- List of SPV captive Power Installations in India
Highlights and Key Takeaways from this Report
Useful Resources
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Contact Us
For more information, contact:
Sumukhi Sreevatsan
Mobile: +91-9962140666
Email: sumukhi@clixoo.com
The EAI Expertise
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