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Benefits of Solar Power for Business in Kerala, India You Simply Can’t Overlook Anymore

Electricity bills in many parts of India, like Kerala, are soaring with increasing power consumption. It was estimated that there was an increase of ~12.8% in electricity consumption in the state in March 2024 compared to the same month the previous year.

The excess fossil fuel used to generate more electricity contributes to the rise in greenhouse gases and pollutants in the air and climate change. Hence, we discuss the benefits of solar power for businesses in Kerala, India, to show why solar adoption is not just a sustainable but a financially beneficial step for the future.  

Also read: Solar Panel Costs in Kerala in 2024: A Comprehensive Guide

The Shift to Solar: Why Indian Businesses Can’t Afford to Wait?

Commercial electricity tariffs in India, particularly in Kerala, are very high for medium and large commercial establishments. There are different factors leading to these high tariffs, the most important of which are

• Kerala's telescopic system for electricity tariff, in which price per unit goes up as consumption increases.

• The state government of Kerala compensates for the subsidies offered to domestic users with lower consumption by imposing higher tariffs on bigger consumers.

• The higher power demands of commercial establishments subject them to paying higher demand charges with energy charges.

• The effect of recent hikes in electricity tariffs

Read further: Power Tariffs Revised In Kerala, Electricity Regulatory Commission Gives Nod For Average Hike Of 20 Paise Per Unit 

Further, several factors affect the reliability of commercial users on conventional power grids in Kerala. These include:

• Insufficient and aging infrastructure

• Significant fluctuations in demand

• Power theft

• History of high Transmission and Distribution (T&D) losses in Kerala

• Dependence on coal for power generation

• Land constraints challenging expansion

• Inadequate grid modernization

Lastly, the Indian government is promoting the benefits of solar power for businesses and other consumers, which is encouraging Kerala towards initiatives such as

• Rooftop Solar Installations

• Solar City initiative in Thiruvananthapuram

• Microgrids in Remote Areas

• government investments and low-cost NABARD loans for solar installations

Key Benefits of Solar Power for Business in India

The following are some of the major benefits of solar power for business in Kerala, India: 

• Significant Solar Energy Cost Savings

The potential savings on electricity bills while using solar energy is 60%-80%. Commercial and industrial consumers can expect this return on investment (ROI) within 3-5 years. But several factors can affect the exact payback period. Some of these are

• System size

• Sunlight availability

• Electricity consumption

• Maintenance

Net metering, which pays credits to the consumers for feeding excess electricity produced by solar panels back to the grid, is another form of solar energy cost savings. 

The reduced dependency on grid electricity can also lead to solar energy cost savings with:

• Lower monthly bills:

• Long-term cost savings with solar energy systems paying for themselves over time  

• Reduced operational costs due to direct storage of solar energy in batteries in DC-coupled systems

Solar systems have an expected lifespan of 25-30 years. During this period they provide stable renewable energy and cut electricity expenses to offer solar energy cost savings to commercial consumers. 

Also read: Government Initiatives for Renewable Energy in India: Updated List

• Government Subsidies for Solar Panels for Business

The Ministry of New and Renewable Energy (MNRE) and Kerala State Electricity Board (KSEB) offer government subsidies for solar panels for businesses. These include

• Procurement-Based Incentives (PBI) for businesses involved in manufacturing and production

• Solar Rooftop Subsidy by KSEB

• Prompt Payment Incentives and KSEB rebates for advance payment

• Incentives for high load factor and good power factor:

• Energy Banking

• E-Kiran Portal

Also read: KSEB Solar Subsidy in 2024: A Comprehensive Guide for You

Besides these government subsidies for solar panels for businesses, companies can also enjoy net metering benefits such as

• Reduced electricity bills

• Increased energy independence

• Enhanced grid stability and dependability

• Minimal maintenance

Business solar incentives also come in the form of depreciation claims and GST benefits.

• Section 32 of the Income Tax Act refers to accelerated depreciation, reducing tax liability and taxable income.

• Solar equipment and services have a reduced GST rate of 5%

• Environmental and Brand Advantages

The benefits of solar power for businesses also include an enhanced brand image for their green initiatives and sustainability goals. 

The increased use of solar power demonstrates that a business handles the environment with care and is committed to sustainability. This can:

• Improve brand reputation.

• Draw environmentally conscious customers.

• A positive effect on investor sentiment

Solar energy advantages for businesses also include the fulfillment of corporate sustainability goals through:

• Promotion of environmentally conscious approaches

• Reduced carbon footprints

• Less reliance on fossil fuels.

• Energy Independence and Long-Term Reliability

The uninterrupted operation of solar panels during grid failures acts as an independent and resilient power source that improves energy independence. Further, with battery storage, businesses can store the excess solar power for later use.

This improves their energy independence during peak demand or outages. It also offers long-term reliability with a continuous power supply even when solar power generation is low or impossible.

Additionally, businesses in remote/rural areas in Kerala enjoy the following solar energy advantages:

• Addressing Energy Poverty

• Energy independence and security

• Reduced electricity costs

• Reduced infrastructure costs and more

Commercial Solar Energy: How Wattsun Energy Offers Scalable and Smart Solutions

Wattsun Energy customizes solar solutions to optimize the benefits of solar power for business. Our solar panel installations are tailored to the needs of our clients. Our other commercial solar energy solutions include

• EV charging stations

• Solar-powered cold storage

• Green hydrogen storage

• Battery energy storage

Here is a glimpse at how we customize our commercial solar energy solutions:

• We tailor the solutions to meet the unique energy requirements and challenges of different industries.

• We design solar systems specific to the consumer's property, including shade conditions, roof size, and orientation.

• Our products are all branded and use European-made components.

• Our certified installers design and install our products with precision.

• We also offer auxiliary services such as

    - maintenance

    - panel cleaning and more

• We help businesses invest in renewable energy with financing options.

• We ensure customer satisfaction with personalized attention and service.

Overcoming Common Misconceptions

A major concern of businesses considering solar energy is that they wouldn't be able to meet the expenses of solar power solutions. We will now examine this misconception with the example of a small business based in Kerala. 

Imagine that the average electricity bill of the business is ?25,000 per month, with electricity expenses amounting to ?300,000 a year (?25,000 × 12). They would like to cover approximately 80% of their electricity needs by installing a solar power system. 

• Solar Energy System Details:

• System Size Needed: 15 kW

• Cost per kW (including installation): ?55,000 (typical in Kerala for rooftop systems)

• Total System Cost: 15 × ?55,000 = ?825,000

• Government Subsidy (approx. 20% for commercial use): ?165,000

• Net Cost after Subsidy: ?825,000 - ?165,000 = ?660,000

Also read: Rooftop Solar System: All You Need To Know

• Energy Generation:

• Kerala average sunlight: ~4.5 kWh per kW per day

• Daily Generation: 15 × 4.5 = 67.5 kWh

• Monthly Generation: 67.5 × 30 ≈ 2,025 kWh

• Approx Monthly Saving: ?20,000 (covering ~80% of ?25,000 bill)

• Payback Period Calculation:

• Net Installation Cost: ?660,000

• Annual Saving: ?20,000 × 12 = ?240,000

• Payback Period: ?660,000 ÷ ?240,000 ≈ 2.75 years

Summary: