Fuel retailers bet on solar power with easy loans
New Delhi   29-Nov-2018

Oil companies betting big on solar doesn''t sound ironic any more. Setting up solar plants -either for generating electricity or steam ¬ is no more a token of commitment to environment. Instead, it is making business sense. No wonder India''s state-run fuel retailers are offering petrol pump owners easy loans to help them go green by setting up solar power units. Indian Oil CorporationNSE -0.67 % is offering loan of up to Rs 5 lakh. Hindustan PetroleumNSE 1.70 % and Bharat PetroleumNSE 2.83 % too have joined the bandwagon on the back of government directives. But it is the economics of solar power that is making the scheme tick. There are nearly 52,000 petrol pumps in the country . Power supply from the grid in rural areas and the hinterland is patchy and only fills up the gap between long blackouts. Petrol pump owners in these places depend on generators, which pushes up costs of operation and eats into their income. Indian Oil''s initial experiments have shown it would be economical to run its 24,400 petrol pumps and Kisan Seva Kendras -low-cost filling stations catering to farmers and rural communities ¬ on solar power than burn diesel in generators. In this backdrop, investing in a rooftop solar system is increasingly beginning to make sense as it provides a reliable source of power, reduces electricity bill and pollution from diesel generators. Indian Oil executives said over 150 dealers have already availed of the loan scheme to set up solar plants at their pumps.

Depending upon the size of the petrol pump, a 24 kw (kilowatt) photovoltaic system on the rooftop can bring down costs by more than Rs 7 lakh a year. This is almost 50 per cent less than the average annual electricity bill currently. Petrol pumps have to pay commercial rates, which is much higher than domestic tariffs, for electricity from grid. There are other benefits too such as accelerated depreciation and associated benefit (80 per cent depreciation in the firs year and 20 per cent depreciation in the second year). It is no surprise that solar energy ha found wide acceptance among dealers of IndianOil, the large st retailer. The period between April 2014 and January 201 witnessed 1,175 new outlet joining the solar club.