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UP SMEs looking to tap solar energy

According to reports, the Small and Medium Enterprises (SME) in Uttar Pradesh are looking at tapping solar energy to deal with persistent power cuts and insulate against rising electricity tariffs.

The 30% central subsidy provided on solar power installations has only added to the attractiveness of the proposition. After subsidy, a typical solar power system costs about Rs 1.40 lakh per kw capacity, although the final price largely depends upon the battery strength.

“We have undertaken solar energy as a mission and our members are actively exploring the opportunity of installing solar power systems in their factories. Some of them have also got these systems installed,” Indian Industries Association (IIA) Executive Director D S Verma told Business Standard.

With 37 chapters and 6,000+ members in UP, IIA is the apex Micro, Small and Medium Enterprises (MSME) chamber in the state. In March 2014, IIA had even organised North India Solar Summit 2014 in Lucknow, where national and international solar companies had participated, including Spanish, German and Finnish firms.

Mumbai-based Startling Solar Private Limited, which is IIA’s knowledge partner for solar energy, has been receiving inquiries and quotation requests for solar power systems.

“We have received trade inquiries from companies based in Kanpur, Jhansi, Meerut, Saharanpur, Lucknow, Sitapur, Unnao etc,” Startling Promoter-Director Anuj Nigam said. The company is currently setting up solar power system in a common effluent treatment plant for leather units in Unnao district. Besides, the company had installed solar systems in nursing homes, petrol pumps and street lights as well.

He maintained solar energy made business sense in the face of rising power tariffs and outages.

“A typical solar power system recoups cost in 6-7 years if the company claims income tax benefits by disclosing its balance sheet. Without such benefits also, it recovers the cost in 10 years,” he informed.

The life of solar power system is pegged at 25 years. The battery needs to be changed every 5 years, while the solar panels are required to be kept clear for greater radiation. State nodal agency UP New and Renewable Energy Development Agency (UPNEDA) has been working towards popularising solar energy.

By 2017, UP is aiming to augment solar energy generation by 500 Mw and has already signed power purchase agreements (PPA) with private companies. Pan India, the Centre is eyeing 22,000 Mw of solar energy in 10 years. Currently, solar energy accounts for about 2,000 Mw of grid power.

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