Solar power has emerged as a viable alternative to diesel power generation for industrial and commercial units that run diesel gensets to meet their power needs. This whitepaper from EAI discusses both the technical aspects of substituting diesel with solar power and the financial benefits from doing so. This whitepaper does not discuss substituting heat energy generated through diesel with solar thermal energy.
The interest in substituting diesel with solar has been spurred by
1. Burgeoning power deficit (9-10% of peak demand in 2012 – 8.9% in the North and 18.0% in the South)
2. Rapid escalation in cost of diesel (46% since 2010)
3. Steep decline in cost of solar power (40% reduction in module prices in 2011-12)
4. Favourable policies encouraging the use of solar power (capital subsidies, soft loans, etc.)
While solar power can provide significant savings when substituting diesel, there are several factors that should be carefully considered to derive optimum returns from the investment in the solar PV plant, such as…