Originally posted in The Business Standard on 12 February 2022
If I plan to build a house in the next three-four years, should I be seriously considering a home solar power solution instead of relying only on the national grid? Will it save me money and help me contribute to fighting carbon emission or is it just a crazy idea?
To most of us, solar power solutions sound like a rural off-grid affair. It’s very costly. It just powers up a couple of lights and a fan. It does not run 24 hours a day. It’s only meant for people who cannot have electricity in their area in the near future.
In cities, solar power seems ridiculous. When a decade back, the government made it mandatory for city dwellers to install a rooftop solar panel in order to qualify to get new grid power connections, many considered it an idiotic tyranny of the authorities. It was because the solar solutions were costly and actually you could not do much with them. People did not install the panels seriously. They faked it to get grid connections that provide electricity at a much lower price.
And yet, I think if someone is considering building a new home, they should consider a hybrid system of solar and grid power. Why? Because of the way the grid power price is increasing and solar power solutions decreasing – I can see grid power is set to lose its appeal to home users.
You can actually have 10 kilowatt of electricity or more from solar home systems today. You can run air conditioners, freezers, electric ovens and other things on a system that comes with a 5- to 10-year guarantee. Unlike the puny solar solutions found in Bangladesh for rural off-grid customers, these solar solutions are getting popular in urban areas in China, the USA, Australia and even India. They are either doing it stand-alone or making it a hybrid solution.
Solar power either saves them monthly electricity bills or gives them the satisfaction that they are not contributing to carbon emission as they did before.
While solar power is still way costlier in Bangladesh than in other countries, it is very cheap in India, China, the UK and many other nations. Our closest neighbour’s average solar power production cost is now only ¢3 (Bangladesh’s solar cost ranges ¢12 and above while grid power ¢6.5), China’s cost ¢4, UK ¢1-7. These costs will decrease further in the coming years.
But to install a solar power system in your urban home, you would need an inverter and a battery system. There has been massive progress in these solutions and you can buy a modular or fixed capacity inverter and battery system.
For instance, Tesla makes a sleek Powerwall with 13.5kWh power storage capacity. This is designed to look so cool that you’d like to look at it as a part of the building architecture. The Tesla Powerwall, which uses a hybrid system (grid plus solar), costs $8,500 before installation in the US market.
Then there are systems that are cheaper and modular – meaning you can increase the capacity as you later need. There are several reliable Chinese brands such as Goodwe Lynx, Huawei and BYD for you to explore as well.
Even in India, you can have a 10kWh off-grid system with a 1,000 sq-ft rooftop for solar panels, at just Indian Rs9.5 lakh!
My take is that in the coming years, these solutions will provide urban users with electricity at a cost cheaper than grid electricity. Grid electricity might become more focused on industrial and commercial use where power demand per customer is much higher – and the solar power system will not effectively be able to handle that in the next decade.
The era of costly power
The era of cheap electricity had ended more than a decade back when the government began rolling out a series of power plants on an emergency basis to end never-ending load shedding. Those emergency plants were costlier than conventional ones. And also, the new conventional power plants also gradually became costlier due to various factors.
We now have regular electricity thanks to government initiatives. But we also have to deal with costlier electricity because the cost of power generation has more than doubled in the last decade. Back in 2010, the per kilowatt (or per unit) power generation cost was just Tk2.5. This has gone up to Tk4.47 per unit for public sector power generation and Tk8.34 per unit for quick rental plants.
An important aspect of this increase is our reliance on imported primary energy to produce electricity has also gone up significantly. A decade ago our imported primary energy was just petroleum. Today we import Liquefied Natural Gas (LNG) from the Middle East and coal, on top of petroleum. Plus we also import electricity from India.
This means, our energy sector became more tied to the volatile international energy market that goes up and down based on demand-supply and other factors. In recent times, prices of both oil and LNG have gone up. This means the government is incurring huge losses while importing these fuels. This loss is being covered by heavy subsidies for the Power Development Board – the main bulk buyer of all power.
Right now, we are paying the government an average of Tk5.64 per kilowatt power. As the government is incurring a heavy loss, the power board is suggesting an increase in the average power tariff to Tk8.58.
People who use a lot of electrical equipment including AC, freezer, oven, computers and other gadgets in the city, however, face a punitive power tariff if they fall into the highest slab users. If you use more than 600 units a month, your per-unit cost is Tk11.5. In other words, a top slab user pays Tk6,900 and above per month.
Going green is the in-thing
Given that the grid power will continue to rely on imported fuel and also our only big local resource, natural gas, is set to completely deplete by the early 2030s (unless we make major new gas discoveries), going green would be the wisest thing for future home builders.
If we consider even the Indian solar solution, going for a home solar solution has become a viable option. Solar solutions will continue to become so cheap that within 2030, grid power is likely to be costlier than solar power.
If more homes opt for solar solutions, mixed with grid power to increase reliability, it would also help the government in ensuring greater energy security. For you, the satisfaction would come from both saving money and contributing to reducing carbon emissions.