30 October 2018 | Vinay Rustagi
India’s solar sector is growing rapidly – total installed capacity has risen from just 1 GW in 2012 to over 25 GW at present and is expected to go up by over 10 GW every year. Fast growth and concentration in water-stressed areas exposes solar to growing water risks – scarcity, rising cost, poor quality, conflict with other social and economic uses and environmental degradation. We estimate that 94% of solar capacity in India is exposed to medium-high level of water risk.
Figure: Estimated water consumption in the solar sector by state
Source: BRIDGE TO INDIA research; India Water Tool, World Resources Institute
Note: Water consumption has been estimated based on installed solar capacity as on June 30, 2018.
Solar panels need to be cleaned regularly as soiling due to accumulation of dust, dirt, pollution, bird-droppings etc. can cause generation losses of 3-6%. These ‘soiling losses’ need to be reduced to about 1% – requiring an average of two cleaning cycles per month – to produce power at a competitive price. That requires water consumption of about 0.1 m3/ MWh, only about 5% of requirement for thermal power plants. But the challenge of procuring this water is acute as solar projects are usually located in dry areas. We also found in our discussions with developers and O&M contractors that there is high level of variation in water usage. Wasteful use is particularly common in southern regions where water availability is relatively better.
We estimate that 60% of the water used in solar sector is sourced from ground through borewells while the remaining 40% comes from surface water sources such as rivers, canals and lakes. Ground water is preferred by the industry as it is almost free and is operationally expedient. While it requires specific regulatory permissions, there are various reports of illegal extraction. If surface water is used, procurement responsibility is generally outsourced to a local vendor, who supplies water through tankers.
It is estimated that cost of cleaning, which primarily depends on cost of water and labour, ranges from INR 42,000-105,000/ MW per year. Higher costs are observed in the dry states of Rajasthan and Gujarat. These costs are rising rapidly. In parts of Rajasthan, water cost has almost doubled in the last 3-4 years due to sharp increase in demand. Karnataka recently hiked tariff for water for industrial use by 100 times. Such drastic, unforeseen increases can substantially affect project economics since cleaning accounts for up to 35% of total O&M cost.
While awareness of water risk is improving slowly, we believe that the solar industry is still managing it on a reactionary basis. Fortunately, there are technological solutions to manage this risk. The two main options include waterless cleaning and anti-soiling coating for panels. Both technologies are now technically and commercially proven. They can help not only in reducing water use by 50-100% but also in increasing power generation output. Payback periods for these solutions can be as low as 2-3 years.
Practices such as wasteful usage and illegal extraction have been going unchecked as the government has waived off requirement for most environmental approvals and permits for solar projects. In absence of such checks and balances, it is desirable that the government and the industry work together to adopt a water usage code for sustainable long-term growth