Solar power promises to change the way electricity is generated in the country, and it has an impact on the real estate sector as well.
With Mr. Narendra Modi raising the target of solar electricity generation from 20,000MW to 100,000MW by 2022 at a cost of $100 billion, the market for everything solar has suddenly come to life. As pollution and the rising cost of power hits the consumer, more and more people are becoming attuned to living a ‘green’ life. Keeping this in mind, many upcoming residential projects in cities across India are using solar power as their primary energy source. Homeowners can also install their own solar panel-based systems to benefit from this technology if it has not been installed a project level.
Solar Systems For Individual Homes
Firstly, a buyer has to decide what his energy requirements are based on electrical equipment in use in the house. A solar system is good enough for major electrical appliances except for water heaters and air conditioners, for which separate, higher-capacity solar panels are available. A solar panel works best on a flat terrace, rather than on slanting surfaces. To access maximum sunlight, the panel should be placed away from shadows.
Cost of Installation and Maintenance
Even though the upfront cost of installing a solar system is on the higher side, it pays off in the long run and eventually proves economical compared to conventional means of power. A roof-top solar system will cost approximately Rs. 1 lakh per KW (this cost is excluding the cost of batteries) before various incentives offered by different states and electricity boards. It has a life of 25 years and will deliver 90% efficiency in the first 10 years of installation, and about 80% from years 11-25. Batteries account for almost 30% to the cost of the total system.
To generate 2000 watts of electricity, one would need around 200 sq. ft. of space on the terrace. As far as maintenance is concerned, the only cost incurred in a good quality solar system is that of changing the battery, if it is a battery-supported panel. Otherwise, the solar panels are totally maintenance-free except for regular cleaning to remove dust, bird droppings, etc.
The other components of the system – inverter, wires, etc. should be of top quality, as lower quality will lead to faster wearing out and add on to the maintenance cost. For inverters, the best option is a pure sine wave model. This is slightly more expensive, but very efficient and long-lasting.
Capitalizing On Subsidies
Since the cost of batteries is prohibitive, various state governments and electricity boards are offering subsidies along with special deals. Any surplus power that a residential solar panel generates can be sold back to the government-operated grid at good prices. For example: if the building’s requirement is 5 units of power and the solar panel generates 7 units, the extra 2 units can be sold back to the grid. On rainy our cloudy days, if only 4 units are generated, the additionally required 1 unit can be sourced from the grid, which is chargeable. However, at the end of the month, if the net outage of power towards the grid is more than inflow, the society or individual home owner stand to make a profit.
Performance So Far
Gujarat has taken the lead in solar power generation, and is ahead of all other states with a commissioned capacity of 929MW, followed by Rajasthan at 840MW generation. Madhya Pradesh, Maharashtra, Karnataka, Punjab and Haryana are now coming out with very aggressive solar power policies focusing on not only giving massive subsidies of as much as 30% on installation, but also attractive buyback offers on power.
Going forward, solar power is going to make a decisive change in consumers’ strategies for buying homes. For developers, it has become imperative to include solar power generation as part of their project cost, and to install the best possible systems to attract potential clients who are willing to pay a bit extra for living in environment-friendly homes.
Tips For Homebuyers
While planning to buy a new house in a society that offers solar power:
· Calculate the cost of solar power generation and compare it with energy rates of the utility company in the area.
· Ensure that branded and high-quality solar panels are installed at non-shadowy place, and that there is a proper maintenance schedule
· If battery-supported panels are used, ensure that the distance between panel and battery is low, as energy is lost with longer distances. It is beneficial to have solar powered batteries for best results.
· Ask about the expected life of the solar panels, and the warranty given on the system.
Authored by: Ashwinder Raj Singh, CEO – Residential Services, JLL India
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