By Ashay Abbhi
The growth of solar thermal has been restricted as compared to the solar photovoltaic (PV) technology due to factors such as low off-take, no incentives and lack of a policy push. Despite the odds, India has maintained its lead in the global solar heat for industrial processes (SHIP) market. According to the Renewable Global Market Status (REN21) 2018 report, the country accounted for 1.5 per cent of all solar water heat collectors in the world in 2016, securing the sixth position. In 2017, it ranked second in solar water heat collector additions, an increase of 26 per cent over the previous year. Further, it became the fourth largest country by size in concentrating solar thermal technology in 2017, with 2.8 MW of installed capacity. The harnessing of solar power to generate thermal energy, especially for use in industrial applications, has a host of benefits for the country. A recent study by the Global Environment Facility-United Nations Industrial Development Organization (GEF-UNIDO) in India states that the energy demand from the industrial sector accounted for 42 per cent of the imported crude oil in 2014-15 (189.43 million tonnes), of which around 30 million tonnes provided thermal energy at temperatures below 250°C. Solar thermal technologies can produce a temperature range of 50°C to 400°C, which can be used in a variety of industrial heating applications and can replace up to 5 per cent of fuel oil. This can not only help in the demand side management of power, but also reduce the consumption of oil and diesel for heating purposes. This will, in turn, decrease the country’s dependence on oil imports.
According to Jaideep Malaviya, secretary general, Solar Thermal Federation of India (STFI), the last decade witnessed the emergence of concentrating technologies producing heat energy for community cooking and SHIP. The country has great potential for SHIP (due to the unending demand for heat and a high direct normal irradiance in many areas. As per the International Energy Agency, India and Mexico have the highest number of new solar heat in industry plants as of 2017.
STFI had undertaken a study, in consultation with all stakeholders, to identify the potential industrial sectors requiring heat energy up to 150 °C. The GEF-United Nations Development Programme (ended in December 2016) and the GEF-UNIDO programme (ongoing) have made a huge impact on the Indian SHIP market. The installations in SHIP have crossed 35,000 m2. Globally, India holds the fourth place in the SHIP segment, after Oman, China and Italy, and is the only country in the world that has showcased SHIP applications across multiple industry segments unlike other countries, where the SHIP application is restricted to segments like dairy or mining.
India’s growing solar thermal market and leading position in the world is largely due to the best practices that it follows. Malaviya says, “The solar water heater market for domestic heating is matured. It is now an acceptable technology. But, in my opinion, the mandatory installation by electric utilities of Karnataka is a powerful driver. Subsequently, property tax concessions are also encouraging. India registered a 26 per cent year-on-year growth of solar water heaters in 2017 and notably, without any fiscal incentive, for which manufacturers must be credited.”
If all electric utilities in the country realise the advantage of solar water heating systems by way of abating their peak demand, then it will push the market to grow further. A typical solar thermal system has about 65 per cent conversion efficiency and each square metre of collector area on a normal sunny day is equivalent to 2 kWh of power used for heating. Considering the long-term implications of the technology in saving power, STFI has now demanded that all future residential buildings, beginning with the ones in the designated solar cities, must have a mandatory clause for solar water heating.
Malaviya says that quality, standardisation of technologies and best maintenance practices must be adhered to by manufacturers. The solar water heater installations must be made a part of the rooftop solar targets. The government must give equal space to the solar thermal segment and draft more stringent policies to help the market grow.
Challenges and opportunities
The import of substandard, evacuated, tube-type solar thermal systems from China is one of the biggest trade barriers that makes domestic manufacturing unviable. There is a need to impose higher anti-dumping duties on them, akin to the PV module manufacturing segment. Also, stricter implementation of the Bureau of Indian Standards (BIS) standards for evacuated tube systems will help keep the quality under check. Currently, only flat plate-type systems are subject to BIS accreditation.
Other challenges include lack of volume demand, low awareness amongst bankers and financial institutions, policy vacuum for mandating industrial heat like solar purchase obligations, lack of technology knowledge with certified energy auditors and managers, and no mandatory enforcement of BIS standards.
Malaviya believes that India has the potential to be the global leader in solar thermal as the business environment is conducive for meeting heating demands in domestic, industrial and commercial establishments. The attractiveness of solar PV with the coming of net metering is leading to a “battle of roofs” owing to space constraints in deploying both types of solar technologies, which is likely to challenge the domestic solar water heater industry. For encouraging SHIP systems, demand must be created by way of either obligation or attractive fiscal incentive to industries. Institutions like the Petroleum Conservation Research Association and the Bureau of Energy Efficiency must join forces and incorporate appropriate measures to implement solar thermal heating.
According to a study, dairies, metal processing (automobile components), food processing, and chemicals and rubber processing units, breweries, pharmaceutical companies, textiles and desalination plants require heat energy up to 150 °C. The price uncertainty of fuel oil and life cycle benefits are attracting these industries to opt for SHIP. Meanwhile, the Ministry of New and Renewable Energy has set a target of 90,000 m2 area to be utilised for solar thermal technologies until the year 2022. Quality systems and the desire to do away with fuel oil heating can even raise the level to 100,000 m2 annually. More initiatives need to be introduced to drive growth in the SHIP market. One such initiative could be the introduction of renewable heat obligation in industries on the lines of renewable purchase obligations.
Another initiative could be to encourage projects through renewable energy service companies (RESCOs). In the RESCO model, the beneficiary does not invest upfront, instead the RESCO commissions the project and also arranges for the finance. The invested money is recovered under an agreement against the savings provided. This would increase user confidence as qualitative systems would be offered for the deployment of solar thermal technology.
Moreover, nearly 70 per cent of the components in a SHIP system are made domestically, save for the mirrors and reflectors. They require a special type of low iron glass, which is currently produced by a few global manufacturers. High volume production can, however, pave the way for indigenisation as economies of scale would help manufacturers achieve commercial viability, making SHIP a 100 per cent “Make in India” initiative.
With solar PV gaining traction rapidly, there is still hope for solar thermal technologies, especially with the growth being witnessed in the industrial corridors of the country. A policy and regulatory push, however, is needed in order to create the right market for the technology. India’s leadership position in the global SHIP and solar thermal segments must be leveraged to help domestic manufacturers export technological best practices to emerging countries. However, concerted efforts by the government will be required in order to make SHIP a success story.
Image Source: STFI