Commercial and industrial (C&I) consumers in Uttar Pradesh could substantially reduce electricity costs through rooftop solar, with an estimated levelized cost of energy (LCOE) of ₹2 (~$0.021)/kWh–₹2.10 (~$0.022)/kWh, compared with landed grid electricity tariffs of ₹7.2  (~$0.076)/kWh–₹7.9 (~$0.08)/kWh.

The state’s provision allowing rooftop solar installations of up to 2 MW, subject to contract demand and applicable regulations, creates opportunities for businesses to offset a portion of their grid electricity consumption.

However, the savings depend on choosing an appropriate procurement model, securing financing, and sizing installations to match electricity demand.

Rahul Makahaniya, Chief Marketing Officer at Soleos Energy, said businesses often spend considerable time evaluating whether to invest in solar through the capital expenditure (CAPEX) model or procure renewable electricity through group captive or third-party arrangements.

He identified procurement model selection as the primary challenge, followed by financing and regulatory compliance.

Makahaniya noted that renewable energy projects are eligible for priority sector lending under the Reserve Bank of India’s framework. However, businesses with weaker balance sheets, particularly those operating on thin margins, may struggle to secure financing.

Companies generally prefer the CAPEX model for projects below 5 MW, while larger projects tend to be developed under the operating expenditure (OPEX) model, depending on their financial position and requirements.

Saurabh Sharma, Founder & CEO at Umangot Solar, observed that rooftop solar offers opportunities across residential, commercial, and industrial consumer categories, with considerable scope for further adoption.

Module Quality and Long-Term Generation

Ashad Mofiz, Marketing & Communications (Lead), RPSG Solvanta, said module prices and rated efficiencies shouldn’t be the only criteria for procurement.

Businesses must evaluate module degradation, warranties, reliability, and total electricity generation over the system’s operating life before setting up solar systems.

Mofiz explained higher-wattage modules can deliver approximately 20% more power in certain configurations, potentially reducing balance-of-system costs and LCOE.

However, actual generation may be 10-15% lower than output measured under standard test conditions, depending on irradiance and installation conditions.

Makahaniya emphasized the importance of mounting structure angles, module wattage, historical irradiance data, and long-term generation estimates.

He also highlighted P50, P70, and P90 generation assessments, with P90 providing a more conservative estimate for evaluating project performance and financial risk.

Optimal Project Sizing

Matching solar capacity to a consumer’s electricity demand is critical to achieving projected savings.

Mofiz said businesses often size installations without adequately evaluating consumption patterns.

For example, a consumer with a 100-kW connected load may need only 30-40 kW during peak solar generation hours, with higher consumption in the evening.

An oversized rooftop installation could generate electricity the business cannot fully use, reducing project returns when surplus exports are restricted or compensated at lower rates.

Conversely, an undersized installation may leave a significant portion of the consumer’s electricity demand dependent on higher-cost grid power, limiting potential savings.

Mofiz insisted solar installations should be designed around individual consumption profiles rather than treated as standardized products.

He suggested that consumers with substantial evening demand consider hybrid energy solutions to better align electricity availability with consumption requirements.

Battery Storage Economics

Industry experts also discussed the potential for battery energy storage systems to replace diesel generator-based backup power.

Makahaniya said diesel-generated electricity costs approximately ₹25 (~$0.263)/kWh to ₹27 (~$0.284)/kWh, compared ₹13.5 (~$0.14)/kWh for renewable electricity combined with battery storage. This includes an estimated battery-related cost of ₹8 (~$0.084)/kWh.

Under these assumptions, solar-plus-storage could save about 46%–50% compared with diesel generation.

However, he cautioned that rooftop solar-plus-storage remains economically challenging for many C&I consumers, given battery costs and dependence on imported components.

Storage may still be attractive for businesses that need backup power or to manage short periods of high electricity demand.

Solar Prices and Procurement Timing

Makahaniya said solar prices have stabilized and could rise in the coming months, making timely investment important to maximize savings.

Experts emphasized that module quality should not be compromised to reduce upfront costs.

Industry participants emphasized that lower upfront equipment costs should not come at the expense of long-term generation performance and reliability.

They also advised businesses to consider the applicability and expiry of exemptions under the Approved List of Models and Manufacturers (ALMM) framework when planning solar investments.

The speakers shared these insights at Mercom’s Lucknow C&I Clean Energy Meet held recently.

The next C&I Clean Energy Meet event will be held in Pune in November 27.