Nepali Times: Why opt for solar when Nepal is so rich in hydropower?
Raj Kumar Thapa: Solar should be seen as a complimentary energy source to hydropower and not as a competition. For the last 20 years we have focused largely on only one source of energy. Big hydro projects have been delayed due to political instability and lack of investment. We have built small run-off-the-river systems but these are not going to really solve the country’s problem. Most hydro projects are working at 14% capacity during the dry season. It is time for Nepal to look at a mix of energy sources. Hydro is going to take a long time but the demand for electricity is going up no matter what.
Where does solar fit into this energy mix?
The load profile peaks in the mornings and evenings, but solar is perfect for daytime demand. At that time, hydropower can be stored and used during the peak hours.
What are the advantages of solar over hydropower?
Solar energy is more reliable, quick to implement, world over the costs of solar energy has come down and the technology has improved. A hydropower project takes three years to build but for solar it will take only six months. Agreed, solar is a bit more expensive but the load centres can be closer. Currently, we lose almost a third of electricity generated in transmission.
Should solar generation be decentralised or installed at utility scale?
The best system in Nepal is to go for the grid connectivity systems. If we instsall solar projects that go up to 5 MW, 10 MW, or even 100 MW then our daytime load shedding will be removed in 2-3 years. The night time demand can be met through hydropower.
Who should lead these projects?
It will be more efficient if the private sector takes the lead. The NEA should restrict itself to buying and selling energy. All NEA has to do is identify locations, ask for a quotation for how much the private sector will be selling for. The whole tendering process can then be completely avoided so that suppliers don’t go for less reliable technology.
The market right now is being driven by subsidy, how sustainable is that?
People are opting for solar now because of the subsidy, but once it’s withdrawn things are going to stand still. Subsidies are a good way of promoting solar at first high interest rates make solar unaffordable. We have to find the correct balance. In Nepal, the the time has come where it can be taken up commercially.
What are the key concerns the solar industry wants addressed in the current budget?
The government has removed taxes on solar panels, inverter, batteries, which are major components and should continue. The subsidised interest rates should also be kept for some time to tackle energy deficiency with a multi-pronged approach. At the macro level, however, government has to give incentives such as tax rebates like they have given to hydropower. They should think of it as a mainstream energy and give it the same facilities.
Centralised power is cheaper, so instead of subsidies for off grid projects in urban areas, bigger solar projects should get incentives.