Solar panels are made up of photovoltaic (PV) cells made of silicon. When the sun’s rays hit them, these cells convert sunlight to electricity. Individual cells are wired together to form a solar panel. Panels are typically 2 meters by 1 meter. They are coated in tempered glass, which allows them to withstand harsh weather.
The electricity produced by a single solar panel is not enough to power a home or business, so multiple solar panels are needed as per the requirement.
Since most of the electrical appliances use AC, this system has an inverter which converts DC to AC.
Once electricity is produced by the solar panels and converted from DC to AC by the inverter(s), it flows through your electric meter and into your home or building. It will be used on-site the moment it is created. Any excess will flow back out through your electric meter and onto the local grid.
In a solar rooftop system, the solar panels are installed on the roof of any residential, commercial, institutional, and industrial buildings. This can be of three types (i) Solar Rooftop System with storage facility using a battery, and (ii) Grid Connected Solar Rooftop System (iii) Hybrid Solar system.
Such rooftop system has a battery for a storage facility. The solar electricity is stored in the battery and can be utilized during the night when the sun is not available.
A grid-connected solar PV (photovoltaic) system is connected to both the grid and the solar panels. In the daytime when Solar PV system is producing electricity, it is used to power loads of the building. In the case of excess generation, it is sent to the grid, which acts as a virtual battery. In the night, when there is no solar generation, the power stored in the grid can be used. In case of additional requirement, excess electricity can also be taken from the grid.
Solar PV systems are durable and have a long life. Solar Panels come with a performance warranty of 25 years.
On-Grid system is one of the simplest and economical solar PV systems.
Here, the solar panels are connected to an on-grid inverter which in turn is connected to the utility grid.
The power generated from solar is first supplied to the loads and any excess power is sent to the grid through a bi-directional meter. Here, the grid acts as a virtual battery. When there is no solar generation during night time, this power can be used back from the grid. And if this excess power is not used back, then the electricity provider pays for this through the net metering facility. The maintenance required for these systems is also lesser owing to the lack of batteries. This system is ideally suitable for those who are looking for reducing their power bills.
Off-Grid Solar PV systems are also called as stand-alone systems. They are independent of the utility grid.
Here, solar panels are connected to an off-grid inverter through a charge controller which in turn supplies solar energy to the loads. During the daytime, the solar powers the load and excess energy are stored in the batteries. During night time, when there is no solar generation, the batteries power the loads.
This system is ideally suitable for remote areas without grid connectivity and also for places with frequent power cuts. The off-grid system gives the building owner a sense of independence, as they are no longer dependent on the grid and are unaffected by grid failure.
The hybrid solar PV system has the best of both on-grid and off-grid solar PV system.
Here, the solar panels are connected to a hybrid solar inverter which in turn is connected to the batteries and through a bi-directional meter to the utility grid. During the solar generation time, Solar powers the load and excess energy are stored in the batteries. Once the batteries are full, the energy is sent to the grid which can be used back during no solar generation time. In the night time, when there is no solar generation, the batteries power the load, and if the batteries are drained to the cut off limits, grid power is used to power the loads.
If excess power sent to the grid is not used back, then the electricity provider pays for this through net metering. This system ensures uninterrupted power supply.
Capital expenditure model is the most common financial model in the solar industry.
Here, the owner of the rooftop owns the complete solar photovoltaic (PV) system. The consumer consumes the solar power directly and is eligible to claim accelerated depreciation benefit on Tax. The invested amount in this system can be taken either by his funds or through bank loans. In India, solar loans come under priority banking loans, same as home loan category with lower interest rates.
The payback period in CAPEX is faster than other financial models. After this, the owner enjoys free electricity for the next 20 years.
A developer approaches a rooftop owner offering to finance the installation. The clients will have to agree on the terms and conditions given by the developer to avail a lease. This legally binding lease will let the developer install the complete system at his cost and maintain it. The rooftop owner signs a power purchase agreement (PPA) with the developer for around 15 years. There are two sub-models under this known as BOOT and BOOM.
In these models, the rooftop owner will be paying around 20-40% lesser tariff for electricity compared to that of the electricity grid.
This model, the developer transfers the ownership of the system to the rooftop owner after some years when he has taken back his investment with a considerable rate of return.
In this model, the developer holds the ownership of the system throughout and maintains it and gets into a long term PPA with the rooftop owner.