Centralized vs decentralized solar: A comparison study (India)

Growth of solar in India has been remarkable, with the installed capacity crossing the 50 GW mark. However, most of the assets are in utility format, with negligible share of decentralized plants. Centralized projects are preferred due to their competitive generation cost, or LCOE. Our study compares a centralized solar project with a decentralized plant on economic, social and technical aspects. Economic assessment reflects competitive cost of energy near to the point of consumption (landed cost) for both these plant types after accounting for transmission losses and associated charges. On technical aspects, we discovered a shifting solar curve, as the plant locations move from east to west of the country, thus providing an enlarged window of solar power generation. Utility scale projects preclude participation of smaller entities and leads to asset concentration. In contrast, decentralized plants promote community participation, generate higher employment, while enabling energy access for the local community. A balanced policy approach needs to be followed, promoting both types of project config-urations. We propose setting up spatially dispersed solar plants along the longitudinal stretch of India, co-located within the substations using standardized templates. This shall enable fulfilment of climate goals, while ushering in a just transition.(c) 2022 Elsevier Ltd. All rights reserved.

Automated summary

The growth of solar energy in India has been remarkable, surpassing 50 GW of installed capacity. However, most of the solar assets are centralized utility projects, with very few decentralized plants. This study compares centralized and decentralized solar projects in terms of economics, social impact, and technical aspects. The economic assessment shows competitive energy costs near the point of consumption for both types of plants after considering transmission losses and associated charges. On the technical side, a shifting solar curve is observed as the plant locations move from east to west, resulting in an extended window for solar power generation. While centralized projects exclude smaller participants and concentrate assets, decentralized plants promote community participation, generate more employment, and provide energy access for local communities. A balanced policy approach that promotes both types of project configurations is recommended.