Written by Prashin Chaturvedi, Business Transformation Leader –
India’s Prime Minister Mr. Modi visited the Silicon Valley last month, and on the itinerary were the obvious inclusions – Apple, Google, Facebook, Microsoft. Also on the list was a curious entry – Tesla. Why Tesla? Modi surely did not make the high-profile visit to get an early sneak peak into the new Model X. Modi, it turns out, wasn’t there to bring Tesla’s relatively expensive electric car technology to India, he was there to learn more about one of Tesla’s lesser known products – their lithium-ion home battery system – Powerwall.
Great discussion about solar/batteries empowering rural communities — Elon Musk (@elonmusk) Sep 27, 2015
Powerwall is a wall-mounted lithium-ion home battery system designed to store energy from rooftop solar panels. It can hold up to 10 kilowatt-hours of energy, enough to power a typical home for about 10 hours. It enables homes to be powered by solar energy during the day and by battery during the night time. In effect, the rooftop solar + Powerwall combination can enable consumers to fulfill 90% of their electricity needs off-the-grid in sun-rich regions- like India.
I wrote last month that the price of a Tesla Powerwall could come down to half, and the price of solar energy could come down to one fourth of what it is today by 2020. This together with the fact that there is strong and growing public support for solar energy – indicates that we are on the cusp of a residential rooftop solar + battery revolution. Powerwall could be a major cash cow for Tesla in 5 years time, and there is no international market in which it could have more of an impact than in India. Here’s 5 Reasons why –
1. India’s Power Grid System Is Broken
More than half of India’s population has very little access to electricity. The problem is complex and multi-dimensional, but the bottom line is this – the power needs of Indians are just not getting met by the unreliable power grids. The fact that the power demand of Indians is likely to double over the next 10 years means that there is a massive opportunity for a market solution.
2. India Has Massive Solar Power Potential
It wouldn’t come as a surprise to most that India gets tons of sun, which obviously implies a massive solar power potential. In fact, a recent study estimated that India has solar power potential of 750 GW, which is more than six times India’s current power demand (120 GW). India’s current solar power installed capacity is 3GW, or less than 0.5% of this potential.
3. Indian Private Solar Sector Is Booming
According to a recent report, India’s solar industry is expected to grow by 250% just this year. Softbank, Foxconn, and Bharti recently announced a three-way joint venture to invest $20 billion in the solar sector. Other large private sector firms have also committed investments worth more than $5 billion. A private sector driven marketplace for solar industry is certainly booming in India.
4. Indian Government Is Making A Big Solar Push
The new Indian government under PM Modi has committed itself to a massive push towards solar energy. In fact, Indian government has increased its solar power capacity addition target five-fold, from the initial target of 22 GW to 100 GW of installed power capacity by 2022. Government support is likely to enable a conducive ecosystem for rooftop solar solutions to flourish.
5. Indians Are Adept At Solving Their Own Problems
India, they say, grows despite the government. Indian jugaad – or frugal ingenuity – is now a global management buzzword, but in India it just means getting stuff done with minimal resources and despite the government. The private sector has stepped in and solved many problems caused by ineffective governance. Unreliable supply of electricity is easily one of the biggest problems that remain to be solved, and the private enterprise is gearing up to solve that as well.
India has a big opportunity to leapfrog the power grid to individual power generation
A large portion of Indian population leapfrogged the landline directly to mobile. It used to take years to get a landline installed, largely because of administrative incompetence of public sector telecom companies. Now, it takes a few hours to get a mobile phone activated by one of the many private company. A similar moment is emerging with regards to energy consumption in India.
It is estimated that solar will reach grid parity in India by 2019, which means that solar power will cost less than or equal to power from the conventional grid. Indian households, currently suffering the tyranny of power cuts could install a rooftop solar + battery combination, utilizing the grid electricity only as a backup, in case rooftop solar + battery could not meet their needs.
The incentives to move to an individual power generation model are far higher for India, than they are many countries in the West. A common joke in India is that the only government action you can rely to happen on time is the power cut. India has solved many of its problems through private action, and macroeconomics may be coming in place for Indians to solve their electricity problem.
What India expects from Mr. Modi is to operationalize his maxim of “minimum government, maximum governance” and develop an ecosystem in which India can shift from a dirty coal-powered economy to a clean solar-powered economy. He was a big supporter of solar as CM of his home state, Gujarat, and perhaps he can bring the same level of enthusiasm to the national level.
For each house that would move from grid electricity to rooftop solar, we would be taking equivalent of 3 cars off the road a year. As India overtakes China in terms of population in 2028, hopefully many of its homes and businesses would be powered by rooftop solar and battery, for the sake of our future generations. It’s an idea whose time has come.
Would you consider rooftop solar + battery for your house?