Economics of Grid-Connected Distributed Captive PV Power Plants near Villages in India

Abstract

Solar energy is most widely distributed renewable energy source as sunshine reaches the doorsteps of the consumers
every day. Being distributed energy source, solar energy is more suitable for distributed population in rural areas. Therefore, it
will be better to install large number of smaller distributed captive PV power plants near the villages rather than large
utility-scale PV power plants. No technology can grow in the market until and unless it is more economical than the existing
technologies for the same purpose. In this paper, the economics of solar electricity from distributed captive PV power plants
near villages have been evaluated with two types of loans i.e. existing ‘equated installment loan’ and proposed ‘variable
installment loan’. The results have been calculated for all the six regions of India. Results show that with equated installment
loans, solar electricity from distributed captive PV power plants near villages is more economical than grid electricity in four
regions with capacity utilization factor of 17.69% and above. However, with variable installment loans, solar electricity is more
economical than grid electricity in all the six regions of India. Hence, banks need to start giving variable installment loans.