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Solar PV for Telecom Towers – Promising Business Opportunity in India


10 Jan. 2011 by

India is presently one of the largest telecom markets in the world, second only to China, with 250,000 mobile phone towers serving over 670 million subscribers. Factor in the country’s advancing Solar photovoltaic (PV) initiative, the National Solar Mission, and the fact that power and fuel expenditures account for 35% of the operating cost of each mobile phone tower, and one can easily deduce that solar PV and telecom should develop a more symbiotic working relationship. Such a relationship would result in a better overall telecom business model, especially since both factors (PV and telecom) are key elements in India's future growth and role as a global innovator.


That deduction would be wise. Solar (PV) for India’s vast proliferation of telecom towers, as demonstrated below, is the proverbial ‘writing on the wall.’ As it well should be.

 

Is such proliferation of telecom towers realistically sustainable?

 

The CAGR in the past 5 years is about 31% and this figure is likely to grow almost 1.5 times in the coming 5 years. Analysts estimate that by 2015 India will have nearly one billion users and they will be served by about 554,000 transmission towers, 30% of them in rural regions.

 

 

Power and fuel are, as mentioned, the primary expenditures which account for 35% of operating costs, both for passive components (such as steel towers, base tower station shelter, power supply system, etc.); and active components (such as spectrum, switches, and antennas).  BTS requires un-interrupted power in order to serve the signals continuously. Due to the unreliability of electricity in India, Diesel Generators are used as back-up in a Hybrid mode. India, as a net importer of crude oil, faces an inherent dilemma in that its Diesel is linked to International pricing and presently is close to €¢ 70 per litre, with each litre providing approximately 3.5kWh, yielding a cost of about €¢20/kWh. Furthermore, the Diesel supply in most of India’s rural areas is uncertain, at best. This makes use of Solar (PV) power ideal as a supplementary source; and, in fact, the best solution for continued sustenance. The implementation of Solar PV as the primary supplemental source in this realm could also, potentially, solve other problems related to diesel. (The total carbon emissions released by the current diesel generators is the equivalent of 5.3 million tons a year.)

 

For the GSM Technology, it requires an average of 6 BTS to operate one tower – each requiring 10 Ampsof current. Each shelter has two (1.5 ton) air conditioners which offer 1,000W capacity for the key maintenance of the temperature for the shelter’s electronic systems. The DG set is typically 15 kVA capacity, which consumes an average of 3 litres of diesel per hour. Table 1, below, shows how Solar PV is more efficient than diesel and provides better IRR, making it a superior supplement to diesel during day-time hours.

 

 

The Telecom Regulatory Authority of India (TRAI) is under the process of preparing a consultation paper on “green telecom,” which addresses critical issues such as the increasing carbon foot print-contribution of the telecom industry, the need for carbon credit policy for the sector at-large, available methods/options to reduce the carbon foot print, standardization of Green Telecom equipment and increased incentive for their adoption. A framework for monitoring carbon emission and corrective action for the telecom sector is also in discussion.

As a first step the government will make it mandatory for mobile phone towers to be powered by solar energy, a move which will reduce pollution and greatly scale down a key driver of diesel consumption in the country. The Indian government will also extend 30% subsidy, applicable as per the guidelines laid out in Phase I of the National Solar Mission.

Telecom operators and infrastructure providers are already aware of the kind of benefits and advantages of switching over to solar power. As a result of rapid scale up, as well as technological developments, the price of solar power is likely to attain parity with grid power in the near future and this will enable accelerated and large-scale expansion thereafter. The telecom players are now investing heavily in energy efficient systems which will involve a domestic trading scheme for energy efficiency, certified under the National Mission on Enhanced Energy Efficiency under the National Action Plan for Climate Change (NAPCC). Assuming 30% of 500,000 rural towers use Solar PV then by 2015 @ ` 3 million per tower, the business magnitude is ` 450 billion (equivalent €7.5 billion)