It is not unknown that the sun has been worshiped as the symbol of power since antiquity. The closest star to our planet has since then lost a lot of its popularity. Thanks to pollution and quick depletion of non- renewable resources, Mr. Sun has started coming back to the limelight as the literal source of power.
In this Rise High story, we feature Madhu Park Ridge Block B Residents Association for their gritty decision of installing a solar power plant with the objective of being sustainable with respect to their common area electricity consumption. Apartments or private houses often back out of installing renewable energy harnessing set ups, due to seemingly high installation costs. However, it takes vision and patience to implement such a project, keeping in mind the long term benefits.
Why Solar Power?
This project was started as a Green initiative to be self sufficient on the common area electricity requirement. The first thing MPR had to decide was on the capacity they needed for their requirements. Since their monthly consumption is around 9000 units for common area and the average efficiency of a solar system is 4 units per day per kilowatt, they decided to go for a 80 Kilowatt plant.
How Did They Go About It?
The residents and management committee had to decide on the type of solar plant to be installed – on-grid or off-grid? The initial installation cost and maintenance cost of off-grid solar plant is very high. So the choice was on-grid system.
The next challenge was to decide which business model to choose. Their options were:
- a) PPA (Power Purchase Agreement) Model:
– No investment required from society
– Vendor will sell at Rs 6.40 / unit with 2% escalation for first 10 years. From 11 to 25 years, the rate for 10th year will be considered. All the additional charges for using the Solar will be taken care by developer/vendor.
– Society will be paying around 9000*6.4 = 57,600 compared to 84,000/- per month to the vendor. (Saving 26,000/- per month)
- b) Capex Model
-100% Investment from Society
– Society will save the entire electricity bill (84,000)
- c) PPA with Boot model
– Initial payment of 10% should be provided by Society
– Society need to sign the PPA @ 7.5/unit till 15th year
-After 15th year, Solar plant will be transferred to customer with refund of 10% initial amount.
– In this model, the saving is not as high as expected (16,500/month on the electricity charge)
After detailed analysis and discussion, the community decided to go with the Capex Model. With this model ROI will be in 3 to 4 years.
The total estimated cost for 80KW solar plant was about INR 41 Lakhs. Since the society did not possess that kind of fund, they took a loan from ICICI bank with an interest rate of 9.1%. The aim is to close the loan as early as possible and pass the benefits to residents.
The impact of this daring step shows in the cost analysis of the apartment community :
Total Investment: INR 41,00,000/-
Subsidy (30%): INR 12,30,000/-
Net: INR 28,70,000/-
Loan EMI: INR 80,000/-
Avg. Monthly Electricity Payment saved: INR 84,000/-
No of months required to close the loan with an interest rate of 9.25%: 43 Months.
This project was started in Feb 2019 and commissioned on 15th March 2019.
Details of units generated as below
March (Half Month):
Overall this was a great initiative by the society and they are happy to be part of the green initiative for a better future.
Madhu Park Ridge Block B – Rise High Awards 2019
Category : Renewable Energy
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