Have you been hearing and reading about rooftop solar power systems and wondering how do you take the benefit of solar power by living in residential society? Here is good news for you, many residential societies have gone solar and have been enjoying the benefit of cheaper electricity. They also feel proud by going solar. Some residential societies (CGHS / Cooperative Group housing Societies) in Delhi (Dwarka, IP Extension, Rohini, etc) and other cities of North India have saved up to 80% of their electricity bills by going solar!
Benefits of solar power for residential societies is as below –
- Cost recovery in just 3 years
- Guaranteed life of solar plant is 25 years
- Societies enjoy free electricity after recovery period.
- Zero maintenance – solar panels are warrantied for 25 years.
- For example- Oakridge Energy installed 70 kWp in one of the societies in IP extension, Delhi and the society is saving around 12 Lakhs annually. They would be recovering their cost in 3 years.
Generally, the decision lies in the hands of members of the CGHS to get the solar installation done in societies. The committee members take the approval from residents in general body meetings for going solar and then they invite quotes from different companies before deciding the company.
Before taking the decision to go solar, residential societies need to answer the following questions –
Section A – How to compare various models of installation? Which one will be more beneficial for the society?
To make a choice between installation modes, let us try to understand each of the modes. There are three kinds of installation mode which are popular amongst residential societies:
1. CAPEX or Upfront investment Model – In this societies pay for the solar plant and own the asset. The solar rooftop company (installer) is in-chrge of design, engineering, procurement, construction, and also offers long-term maintenance support.
2. PPA model or RESCO model (25 years Long term Power Purchase Agreement with installer) – ZERO investment from societies. Companies like Oakridge Energy take the roof on long-term lease and make their own investment in the solar plant. The asset is owned by company and the company maintains the asset. Limited companies offer this plan. It also depends upon the area of operations. Delhi government has special plans for residential societies.
3. Equated Monthly Instalment (EMI) Plan – Oakridge energy also offers 3-year EMI plans to all residential customers. This is a hybrid plan of CAPEX and RESCO. In this society pays 30% of the project cost to Oakridge and remaining amount is paid in 36 months to Oakridge. Oakridge Energy owns and operate the plant of 3 years and then transfers it to society after full payment from society. This mode was developed by Oakridge Energy for all those who have less trust on the solar systems. Oakridge Energy runs the plant for 3 years to demonstrate the system performance.
Each of the above modes have their own pros and cons. Let us try to compare the modes for your better understanding:
|PPA mode or RESCo|| 1. Zero investment from societies|
2. Saving starts from day 1
3. Operated and maintained by Company. Hassle free maintenance
4. Pay only for power generated 5. Long term power purchase agreement signed with the
| 1. Plant is owned by Company|
2. Roof is leased out to company.
3. Free access permission to be given to company
4. Cumulative saving is much lower than CAPEX model
|CAPEX|| 1. Plant is owned by Society|
2. Return on investment is higher ( Over 32%)
3. Minimum maintenance and maximum saving
4. Roof continues to belong to society
5. Easy loans available for societies
| 1. Upfront investment. Societies must have funds to investment|
2. Sign separate AMC with company for maintenance of plant
|EMI Plan|| 1. Only 30% upfront investment|
2. Operated and maintained for 3 years to demonstrate its performance
3. Return on investment is higher than RESCo Mode
| 1. Plant is owned by company for 3 years|
2. Cumulative saving is lesser than CAPEX mode
The above table would help you in choosing the right mode of installation for your society. You can reach out to us for further details.
Section B – How do we arrive at the solar plant capacity
The plant capacity depends upon following factors:
- Rooftop Space Availability- Generally, 1 KW of solar system requires 100 sqft of shadow free rooftop area.
- Requirement of the society – this generally depends upon the type of electricity connection in the society. There are two ways the residential society obtains power from the DISCOM:
Single point metering system-
- Discom supplies power at one single point to society and further load is supplied to individual houses and common areas by using sub-meters. DISCOM bills the society and society further bills individual residents based on the bill received from DISCOM. If your society has above connection configuration then you don’t need to think about the capacity of the plant and should install as much capacity as your rooftop space can accommodate. Detailed engineering is done to arrive at capacity. This way you would saving the maximum.
- Generally, rooftop spaces are not sufficient to cover society electricity expenses but saves substantial in the electricity bills. DISCOM replaces your common meter with Net Meter. You can read our blog on net metering to understand more.
Individual meters –
- DISCOM connection to individual residents and a separate common load connection. If your society has this type of configuration then you can check the load and bills of the common area to arrive on capacity of then plant. In Delhi, you can still install any much capacity as your roof can accommodate and earn money for any additional units solar to DISCOM. However, in other states capacity is limited by sanctioned load of the connection.
- Common load generally includes your following loads: Lifts, Corridors and lobbies lighting, Parking lot lighting, Water pump/Water motor, Central heating/cooling.
- Based on your society connection configuration you can decide the capacity of solar plant.
Section C – How much would be saving by going solar?
The savings from the solar would depend upon the mode of installation. For example, if you install solar plant in CAPEX mode then your monthly saving calculated using below formula:
Total annual saving = 1400 * solar plant capacity * highest slab rate (inclusive of taxes) + state incentive
To make you understand better, let us calculate the saving for the society which has installed 70 KW –
Total Annual Saving = 1400 units / kW * 70 kW * 10 Rs / unit (including taxes) + 2 Rs / unit (State subsidy of Rs 2 on each solar unit generated) * 1400 * 70
Therefore, total annual saving for the society is Rs. 11.76 Lakhs.
In case, the society chooses to install plant in RESCO Mode. Then the savings are calculated using below formula:
Total Annual Saving = (DISCOM unit rate – Company unit rate) * 1400* Solar plant Capacity + State Incentive
For example- Let us assume society has signed power purchase agreement with company at Rs. 5 per unit of solar production for 100 KW solar plant and DISCOM unit rate is Rs 10 then society would be saving Rs. 9.8 Lakhs annually.
The returns would be much higher in CAPEX mode, but it also depends upon the availability of funds, ability to invest, ability to maintain, etc. The models of PPA or RESCO are preferred where the management is keen to outsource the activity to companies.
Section D – What is the investment required?
Investment would depend upon following factors:
- Mode of installation
- Capacity of plant
In RESCO mode society will not have to bear any cost. The society would only need to provide a Bank Guarantee to company as a payment security, and the installer company would make the entire investment. However, in the CAPEX model, entire project cost is to be borne by Society. The prices are generally decided by state governments through a competitive bidding. Ministry of New and Renewable energy provides subsidy benefits in order to promote solar in residential systems.
We, Oakridge Energy, are one of the leading companies who have done lot of work on residential societies. We understand the specific concerns and requirements of residential societies very well. From taking approvals in the Society’s General Body Meeting, to choosing the right partner for themselves, to selecting the right mode to making it practically commissioned without having a single complaints for any of the residents – we handle this process with you end-to-end.
We have walked along with residential societies throughout this journey. Given our experience, we understand the various issues and challenges that come up during installation of solar plants on residential societies. Following factors need to be kept in mind during the installation period:
- Detailed designing and proper approval from society before moving ahead with installation
- Ensuring no leakage in the roofs during installation
- Minimum noise during installation. Adhering to society timings
- Proper workmanship to ensure no damage to the existing building
- Usage of highest quality equipment for best performance
- Real time monitoring to track system performance
- Obtainment of necessary government and Discom approval
Timeline – Generally, it takes around 2 months for commissioning the plant after necessary approvals from government.
Hope, the above details would have helped you in making your decision faster. You can reach out to us for further details.
Thanks for reading.
“Do you know that think tank of Centre of Science and Environment (CSE) has recommended rooftop solar in place of diesel generators as excellent non-polluting, cost effective alternative to all residential societies”