Solar Energy – Solution for the energy crisis?
Solar panels
Our country is currently undergoing a serious energy crisis, mainly due to lack of foreign exchange to buy diesel and other fossil fuel that is needed to generate energy. As our hydro power generation capacity is around 30 per cent of the total energy requirement, we depend on thermal energy as a main source of energy generation. According to the Minister of Power and Energy, it is envisaged that the cost of energy will soon increase considerably, at least for the high energy consumers. Considering the energy crisis, can solar energy become our saviour?
Solar energy systems
The development of roof-top solar energy generation or ‘solar’ started many decades ago in Sri Lanka but substantial impact has been seen since 2016, with the introduction of the “Suriya Bala Sangramaya” project. The aim of this project was to add 200MW of solar energy by 2020 and over 1500MW by 2050. However, solar adoption in the country is still at a low level, well below anticipated targets.
Up till 2021, Hybrid Inverters were not allowed in Sri Lanka and mainly On-Grid or Grid-Tied solar inverters were deployed in the country. Therefore, the concept of Solar Self-Consumption (SSC) or ‘Solar + Storage” became a viable option towards mid-2021. However, hybrid systems with Li-ion battery storage, which is necessary for SSC, cost considerably more in comparison to on-grid systems. In addition, most consumers are reluctant to change over to mandatory Time of Use Tariff (ToU) when deploying hybrid inverters. Therefore, hybrid deployments did not happen as expected, since their introduction in Sri Lanka.
Current situation
The energy crisis we are faced with since early this year has changed the situation drastically and all electricity consumers are now looking for hybrid or off-grid systems with battery storage, mainly as a solution for long power cuts. Even though such systems are in great demand, only a selected few can afford the right solution with Li-ion batteries which allows Solar Self-Consumption (SSC) capabilities, due to high capital cost.
In addition, Li-ion batteries and Inverters are not considered as essential items by the Government of Sri Lanka (GoSL). Therefore, the consumers are unable to import batteries and inverters as they are restricted items. In some situations, the payment for the solar system is made in foreign currency (US$) by the family and friends living overseas for their loved ones in Sri Lanka. Even so, the solar system providers are unable to utilise such funds to import essential components i.e Inverters and Batteries.
Why do we need SSC?
SSC is a worldwide accepted concept where 80-90 per cent of the generated solar energy is used by the consumer. This system will reduce the burden of the electricity grid (CEB/LECO) as all SSC consumers will draw only 10-20 per cent energy to the grid during nighttime, as opposed to 100 per cent of on-grid systems. Therefore, energy generated and used by SSC consumers will save the GoSL @ Rs.30 per unit, which will amount to a substantial saving of foreign exchange when large numbers of consumers adopt SSC. All SSC systems with hybrid inverters will export 10-20 per cent of energy to the grid. Therefore, the grid will not have the problem of accommodating large scale off-grid SSC systems, unlike when large scale on-grid systems are deployed, which may overload existing transformers, warranting a costly grid upgrade.
How effective is SSC?
Similar to the energy crisis, we are also anticipating a food crisis and many requests have been made through social media and other channels, asking citizens to grow vegetables in their home gardens and other available land. The harvest of one home garden may not be sufficient, even for their own consumption but when we add thousands of home gardens, the idea of growing our own vegetables may seem feasible and make sense.
In the case of solar energy, it is the same and deploying solar systems will take some time to make a substantial impact, but it will make each and every consumer who deploys SSC, 80-90 per cent self-sufficient in energy for at least next 10 years. If we consider deploying 5KW roof-top-solar with SSC on 400,000 roofs out of approximately 6 million households, the energy generation capacity (2000MW) will meet the demand of all residential consumers of the country. The total energy saved will be approximately 6.4GWh per day. Therefore, if we reach a target of 400,000 houses, the residential segment of the entire country will become self-sufficient in energy.
Feasibility of SSC
Unlike growing vegetables in our home gardens, adding solar will require substantial investment. Therefore, many of us may not be able to afford such a system without external funding through a bank loan or a leasing arrangement. As we know, the major cost of a basic SSC system is the Li-ion battery and currently, the duty and other levies when importing batteries may be over 40 per cent.
Therefore, the GoSL should remove duty on Li-ion Batteries, which will bring down the cost and allow large number of electricity consumers in the country to become self-sufficient in energy and reduce the load on the national grid. Also, GoSL should consider Inverters, Solar Panels and Batteries as essential items and take all necessary measures to allow these items to be imported without any restrictions, under a special category of essential items.
SSC will save considerable foreign exchange that is spent by the GoSL to purchase fossil fuels for power generation. Also, a large-scale SSC initiative with the primary objective of carbon substitution will attract Carbon Credit, which could in theory, support the above deployment as a fully funded project of the GoSL, with public and private partnership.
Making SSC successful
We should consider deploying new solar systems or converting existing solar systems with SSC capability and become 80-90 per cent self-sufficient in energy. The GoSL should seriously consider removing all duty and other levies when importing Li-ion batteries, especially when they are deployed for SSC. Banks and other financial institutions in the country should introduce special instruments to fund SSC projects with minimum interest and as much as possible, try to attract low interest funding from investors overseas such as pension funds.
We could also make this a successful venture by encouraging all Sri Lankans working overseas to use their foreign exchange to purchase SSC for their loved ones and relatives back at home. This will eliminate the problem of finding foreign exchange to purchase essential components for SSC such as Li-ion batteries, Inverters, and solar panels.
Also, GoSL should encourage Private and Public Partnerships (PPP) to attract carbon credit for the proposed development and provide low-cost funding for the consumers and at the same time, help the country to reach the target of 70 per cent energy generation from renewable energy by 2030.
(The writer is Managing Director, Innovative Smart Solutions
|(Pvt) Ltd and a specialist in renewable energy systems)
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