A significant 44.2% of the entire electricity generated in India is used for industrial consumption, making it one of the most important sectors with respect to electricity demand. The grid tariff for industrial consumers can go as high as INR 7/unit for non-peak hours and is much more for peak usage. Pertaining to heavy usage, especially during peak hours, electricity constitutes a major variable cost for industries. Industrial solar power, therefore, is a way to reduce the peak loading of the grid and do away with high tariff rates for the peak hours.

The high load requirement and large available rooftop area compared to commercial and domestic consumers make solar a viable and attractive alternative for industries. The other incentive for many big industries to use ‘industrial solar power’ is to show an increased share of renewables in their energy portfolio and meet their RPOs (Renewable Purchase Obligations). Industrial firms with captive ‘industrial solar power systems also have the option of availing tax benefits, capital subsidies and other incentives as applicable.

The solar power produced can be used for normal day-to-day operations of the plant including lighting, ventilation, and equipment power supply. There are certain industrial firms in India which are meeting close to 30% of their power requirements through solar energy. The solar power system used by industries can be equipped with a battery storage system also. The battery storage makes the solar plant even more relevant when it comes to reducing the electricity cost.