India’s use of petrol/diesel vehicles is quite common given the enormous size of the country. People, whether or not they follow other news, keep themselves updated of the prices of petrol and diesel, and closely follow the controversies around its fluctuating pricing. For vast majority of population belonging to middle class or lower-income groups, any change in petrol/diesel pricing or availability is a reality that affects every journey they make.
A price hike in everyday household consumables such as fruits, vegetables, oils, and LPG cylinders, affects people more. Each price hike placed on individual items has an effect on specific sets of consumers. For instance, a hike in fuel price will affect the transport industry more than private users. It is worth delving into the reasons as to why this is becoming a bigger problem with each passing day.
It is long known that fuels like diesel and petrol are non-renewable sources of energy and are only going to be increasingly unavailable in the future. Consequently, import taxes imposed on these are increasing their price, which are empirically only going to become higher with time. Let’s take the case of BS6 which has increased the price of DG sets. This rise is like an adding fuel to the fire, so to speak. The question remains: How will the economics of this situation going to align itself in the future? Is this going to be a lifelong problem?
Problem-solving for survival and comfortable living has been a characteristic skill of human beings since times immemorial. Innovations and inventions have been implemented time and again to fulfil the energy needs of industries and households globally. The energy industry, which has always seen an upward rise, alternatives to non-renewable energy are being increasingly adapted, implemented, and commercialised. Solar energy presented itself as an alternative and has already been implemented widely on a global scale. Solar energy has attracted attention of all in the recent decade and yet most people are unaware of the nuances of how brilliantly and efficiently it can be harnessed competitively. Adding to our discussion on transportation fuels earlier, use of solar system panels for transport services or CNG for better transportation is highly relevant. These renewable forms of fuels are pollution-free without any harmful effects.
Contrasting solar energy with fossil fuels like diesel or petrol yields key points as follows:
- Growth of highly reliable and economical microgrids replacing the need for conventional DG sets for rural areas (being done by EPC players like YOMA, OMC, Husk Power and others)
- Advances in energy storage, meaning that backup power is now cheaper than ever
- Increasing diesel costs (almost Rs. 25-30 per unit) for industrial units as compared to storage-based solar costing Rs. 3-5 per unit.
Additional parameters to understand this better are as follows:
- Cost: Setting up and maintaining a conventional DG set results in a high overall cost which includes the daily cost of petrol/diesel which, in turn, is increasing at an alarming rate. On contrary, the prices of solar systems are getting reduced and have very low running costs, in addition to being financially boosted by the central and state governments.
- Life: Solar systems have an incredibly long life as they have no moving parts, whereas DG sets use diesel, which itself is a non- renewable source of energy and increasingly expensive.
- Reliability: DG sets are unreliable and often require expensive overhauls to be repaired (proven by research at Solar Electric Fund and IIT).
- Maintenance: High maintenance requirements of DG sets lead to disruptive services which results in huge financial losses, not to mention the loss of our precious time. Solar needs minimal maintenance without disruption of services.
- Return on investment: Solar Payback, RoI and NPV (Net Present Value) are always higher when compared to Petrol/ Diesel.
Rooftop solar energy is considerably less expensive than power from diesel generators. Compared to solar energy (Rs. 4-5/kWh), diesel generators create power at about Rs. 17/kWh (a litre of diesel produces ~3-4 kWh). Diesel energy can prove to be costlier once other losses, such as pilferage and evaporation, are considered. Certain applications such as diesel energy and village telecom towers can cost as much as Rs. 40/kWh.
More than two-thirds of India’s population lives in non-urban areas, as per Census conducted in 2011. In rural settings and semi-urban areas, people are still a long way from the national lattice, relying on independent generators for energy needs. Except in cases when they are near huge assemblages of streaming water where they can manufacture hydropower, their choices are for most parts are restricted to either sun-based fuel or diesel fuel.
With both state and central governments providing subsidies on solar, along with numerous other benefits for solar energy supply, the need of the hour is to spread awareness among people about steps to access and use solar energy for household and industrial purposes.
Solar System Series Part-3