By Siddharth Gangal and Aarushi Dave
While the sun maybe shining bright for solar industry in general, if you have opted to go solar, it will shine bright for you too!
While going in for a major investment like solar, as property owner, you are bound to have your apprehensions! But fear not, solar is a major fast-growing industry and you are right in time to join the clean energy movement.
India’s installed solar capacity reached 20GW in February 2018, making it 4 times larger compared to 2650 MW in May 2014. With plenty of financial benefits and schemes now available, it is a lot easier to push aside these financial apprehensions easily!
Installing a photovoltaic system, better known as a PV system, is done with the objectives of saving our environment and saving our income.
For those of you wondering about the what you will gain financially by the installation of a solar system, here are the top 10 financial benefits of going solar:
1.Cutting your electricity bills
The most direct benefit is the drop in your electricity bills that you will notice. By switching to solar, you are no longer buying electricity from the grid. Generating even a portion of your electricity consumption from solar energy, you save big and have significantly lower prices in your electricity bills. Using solar will enable you to move to a lower slab, drastically cutting down your cost of electricity.
In fact, if you consider net metering, you can get credit for the excess energy you generate which you can trade with the grid. Net metering is a financial boon to residential users as your solar installation might not always generate electricity exactly as per your needs. Factors such as time of the day, season or shadows may influence generation. Hence you can exchange the excess generated energy with the grid and use the grid power when your power output is down; you will be billed only for the extra power consumed. This way, you save yourself from grid electricity bills, but can avail power at any time.
At present in India, the states of Gujarat, Maharashtra, Andhra Pradesh, Tamil Nadu, along with Delhi, have some very favourable net metering policies!
2. Save yourself from rising utility costs:
Fluctuating grid utility costs are infamous for taking an upward trend. Making a switch to solar is one of the best ways you can guard yourself against rising costs.
On shifting to a solar system, the rate per unit comes to somewhere between Rs. 3.33/unit to Rs. 5.00/unit.
This value remains constant throughout the whole life of the solar panels. This is what makes solar installation an invaluable one-time investment; once installed it is an asset to you throughout it’s lifetime.
On the other hand, rising electricity costs which go up at the rate of 5 – 10% per year. When you compare these two over a longer period, these small savings become very size-able.
Most solar panels have lifetimes of over 30 years with majority companies offering warranty up to 25 years of the life. Besides, if you opt a solar loan for the initial expenditure, once the repayment is complete, the power for your property is practically free. The maintenance costs maybe an exception; however, they are minimal compared to the predicted rise in grid tariff over the next few years. So, this means that you can live easy, without caring too much about the maintenance of your system!
3.Availability of financial benefits
Despite quicker return on investment, longer use-able life of the installation and warranty, there is one step that still creates hesitation in the minds of prospective users. The initial investment cost.
However, to help potential users smoothly clear this financial hurdle from realising their dreams to convert to solar, there are plenty of subsidies and favorable policies on solar panels, from both the central and state governments, are presently available. Subsidies include 30% discount on the benchmark cost of solar panels offered by the Ministry of Renewable Energy.
Seeing the rising awareness and demand among our citizens to switch to cleaner energy generation for their property, the RBI (i.e. Reserve Bank of India) has undertaken an initiative to aid this switch.
The financing of solar installations and plants has been categorized as ‘Priority Sector’ by Public Sector Banks (PSUs).
This initiative has been undertaken with a particular outreach to residential owners as individuals or housing societies, as well as small and medium commercial enterprises. Plus, is your home under construction and solar installation is taking place during the construction process? PSUs may consider the installation expenses as a part of home loans as house construction costs.
As a home owner with solar, you also avail tax incentives and deductions.
With solar set to become a norm, it is a good idea to stay ahead of the curve and reap the benefits of these subsidies!
4. Great returns on your initial expenses:
It is natural that as a homeowner, it is a big concern for you whether your initial expenses will get suitable returns.
The answer is yes! They will in fact, get amazing returns, through the 20-25 year lifespan of your system both in terms of energy and money.
If you compare with traditional methods of investment such as shares and FDs, solar panels offer ROI of around 20% which is much higher. There is zero risk with solar installation since the sun will always shine.
After the initial payback period of 5-10 years, energy generated is all profit. Here’s a comparison between a solar panel and an FD (for the amount of Rs. 1,50,000):
5. Add value to your property
“Thinking of moving out? What about my solar installation over this property?!”
As a homeowner, this is a valid concern that arises when installing solar over their property. But we have some great news. Photovoltaic system installations add value to your property!
Solar installation is fast becoming a popular choice, making a lot of conscious and aware home buyers want to invest in property that has solar installation. Solar is an asset that won’t depreciate in value as years pass by, unlike your car. Some factual data to prove our point:
- According to a report by the Appraisal Insitute, a study by the Lawrence Berkeley National Laboratory in 2014 conducted in California found that for a typical 5kW residential installation could add $30,000 to the value of the property.
- A study conducted by National Renewable Energy Laboratory (NREL) concluded that homes with solar panels sell 20% faster and for more money.
So even if you may move, the solar PV system will be sold with it and you will get paid more for your house than what you paid for the system. Solar is the gift that keeps on giving! This might not be your immediate objective while installing solar, but in the long run, for an asset as valuable as your property, solar is going to be icing on the cake!
6. Create local economy:
The process of purchase, installation and maintenance of solar is a wholesome one, involving members of different professions coming together to make your installation smooth. This not only simplifies your switch to a PV system, but also makes it a community effort boosting the local economy.
Solar creates a multitude of jobs; in business, technicians, engineering, installation and manufacturing. Your installation will do you bit for fostering this community at a neighbourhood and a national level.
An increase in the Indian economy directly impact each citizen. So broadly speaking, more economic activity results in more jobs, more money and of course, a richer country. A richer India will make the Rupee stronger and you can do more with your money. Other outcomes of job growth would be lesser criminal activity an agitations, research and innovation boost and drive awareness. Hence it will contribute to making our country a safer place, progressive and cleaner place to live.
Thus, in the bigger picture, joining the worldwide solar moment, personally or an institute, you do your bit to the local and national economy.
7. Branding your institute and setting an example!
Thinking of solar installation for your institute/organisation? That’s in fact a great move! Here’s why:
i. Great for your brand name:
Irrespective of whether you are educational institute or a company or any organisation in general, the “clean energy factor” for your workspace will definitely make you stand out in the crowd!
ii. Using savings to improve infrastructure
Air conditioners, computers, labs are increasing demand for electricity. Adopting solar now can give instant savings which can be used for upgrading infrastructure such as new classrooms, upgrading the library and conducting training programs for students/employees.
iii. Reduced dependence on the grid:
Since you no longer rely directly on the utility grid for power, your institute/organization is protected from both power cuts and rising power costs. An upper hand for both your pocket and productivity!
iv. If you are a company:
a. Industrial tariffs are much higher than residential tariffs. Hence, it makes even more sense to adopt solar energy right away. It is obvious that this will bring you savings in the long run.
b. As mentioned before, savings can be used for improving infrastructure and other targets; plus, a bit of a boost to the brand name.
v. If you are educational institute:
a. Very often, education institutes have a lot of unused roof space. This roof space can be productively used to generate revenue and power for your institute. Cutting expenses on power and providing students power without shortage, especially institutes in rural areas can benefit you in plenty ways!
b. It fosters the spirit of goodwill and the “green factor” makes a mark on the minds of students, their families as well as prospective students. It is an indicator of your dedication to contributing positively to the world.
c. Installing solar power in your school or university campus is one of the best ways to brand your campus. It is in fact a great marketing opportunity for the institute.
d. The solar industry will be employing and creating several more jobs for the present generation of students in the near future. By undertaking such a project, institutes can familiarise their students with solar and teach them about it’s working and finances hands on.
e. Universities can opt for purchase with cash or loan options as well. Educational institutes are given priority for subsidy under various government schemes. Subsidy up-to 30% can be availed from the government. The Solar Labs listed installers will do the paperwork for you and give you a seamless transition to solar.
In fact, even on becoming the first one in your neighbourhood to install a PV system, you could be setting an example for your entire locality and winning praises! Solar installations give you the real possibility of owning an asset that has you bragging about but also brings you savings.
8. Great Timing:
If you asked when the best time to move to solar would be ideally, we would easily say NOW! Simply putting it, the present time is best for making this critical switch for three main reasons:
i. The rates of solar installation are presently lower than they have ever been. 2017 saw a staggering 40% price drop in solar tariff rates. According to an article in The Guardian, “Analysts called the 40% price drop “world historic” and said it was driven by cheaper finance and growing investor confidence in India’s pledge to dramatically increase its renewable energy capacity”.
This is an indicator of how good a time it is to join the collective movement for solar.
ii. Availability of several financial services, schemes and incentives is increasing fast and is better than ever. This is will make the transition, easier than ever, for your pocket.
iii. As mentioned before, thanks to conventional unclean sources of energy such as coal and oil shrinking in quantity, the prices of grid powered energy are going to rise. This trend is not stopping anytime soon.
The fourth reason would of course be the fact that the present is indeed a great time to do your bit to save the planet! And of course, save some money in the process.
All of these reasons are evidence that it’s probably the best time to cash in on these benefits offered by solar installations!
At The Solar Labs we give you our word that the sun is shining brighter for solar that it has ever before! While it is an ecological step on your part, this renewable and inexhaustible source of energy will never drain resources of the earth, or your bank balance!