The Revolution

The telecom towers burnt about 2 bn liters of diesel and produced 5.3 mn tons of CO2 in 2010. It should not come as a surprise that these diesel guzzling giants will consume 2.8 bn liters and produce 7.4 mn tons of CO2 by 2015. It just goes to show that the telecom tower industry has evolved into the second largest consumer of diesel-next only to the Indian railways.

The tower industry's rapid growth resulted in the tower companies adopting diesel-powered systems at the telecom sites. However the systems proved to be unsustainable in the long run. The core focus of tower companies was expansion and profits at the expense of strength and steady growth through more energy-efficient solar power systems. Therefore it was quite obvious that an urgent action was needed to be taken to switch over to solar power systems.

One of the main culprits was outsourcing of highly technical services to vendors (OMEs and SMEs) with the lowest bid without checking their credentials to execute the job. Over the years, some tower companies lost the technical expertise required to run a company efficiently. In order to resolve the technical issues, they depended solely on vendors' help to reduce energy consumption.

During the expansion phase, DoT and Trai failed to enforce the minimum standards for power systems at the telecom sites. As a consequence, the sites ended up as free-for-all testing grounds for vendors supplying new equipment with little or no overall understanding of the power and battery system. The pressure from mobile operators to reduce monthly energy cost has resulted in tower companies taking unnecessary risks to try out anything that comes with a promise of energy reductions.

DoT, TEC, Trai, and MNRE realized that using diesel to power the telecom sites is unsustainable and came up with a pathbreaking feasibility study to switch from diesel to solar power systems in 2008. The recommendations in the white paper were farsighted but the execution of them left a lot to be desired because the technical expertise to evaluate the kind of solar system to be adopted was lacking in the organizations. Some tower companies ended up trying as many as 10 different solar solution providers without any success.

The status quo continued until early mid-2011 when the general public and Greenpeace movement started putting pressure on stakeholders to switch over to a more eco-friendly power source. MNRE came up with a scheme to subsidize 30% of 400 solar-powered sites, but unfortunately only 75 sites were officially taken up by the tower companies.

Unsustainable
Business Model

The tower companies are finding it increasingly difficult to pass on the hidden cost for diesel theft, transportation, DG maintenance, and battery replacement to the mobile operators. The current tower company business model is dependent on the number of tenants per site as their only source of revenue. According to industry estimates, the break-even ratio is 1.7 tenants per site.

Many tower companies are barely getting the high upfront investment outlay (`30 lakh) for the new sites. The long payback period of about 8 years, with single tenancy, means tougher times ahead. A recent news report of tower companies up for sale is reflective of the current market sentiment. Valuations for tower companies have been much lower compared to the last year. The lack of technical expertise, high operational costs, and diesel theft are serious issues affecting the viability of telecom tower business. These issues are difficult to resolve because of the huge number of towers spread out all over India.

The Technology

In China, the third generation fully integrated solar power system was developed out of necessity because like India, many remote regions in China are without grid power. Europe and the US didn't have these issues and there was no necessity to develop integrated off-grid solar powered systems for the telecom towers. China is the only country in the world with more than 40,000 autonomous solar-powered telecom sites operating in the remote regions under extreme climatic conditions (-60°C to +50°C). They are the leaders in high-end, fully integrated autonomous solar power systems for the telecom towers.

The general perception about the solar power systems in India is that all the solar systems are having the same tech base and they will work irrespective of the kind of systems adopted. Very few realize that telecom tower solar systems are the most complex of all the solar systems. They involve integrating power supply from multiple power sources, solar panel, grid, battery, and getting them to work in tandem.

Local solar solution providers are not confident that a solar system without DG is possible. Their half-baked solar/DG solutions will not resolve issues of diesel theft and high operating expense. It will only reduce some of the issues but the root of the problem caused by using diesel is not eliminated.

India's solar industry is still in its infancy and most solar system solution providers are still offering the first-generation solar/DG systems that are not suitable for the telecom sites. The third generation fully integrated solar power solution providers were not available until recently. A well-designed, fully integrated solar power system can reduce monthly energy expenditure by as much as 90%, without burning a single drop of diesel. A right-sized battery bank with an intelligent charge controller will last for minimum 5 years.

The solar power systems for telecom towers must be designed keeping in mind the provision of remote access to individual client's energy consumption for billing. The existing billing procedure requires an army of workers and long hours of manual data preparation. A smart solar power system must provide all the necessary information for billing, asset management, and remote site surveillance.

The solar power system remains the only economically viable and tested solution for the time being for telecom towers. The other power systems like fuel cells, lithium, flow battery, biogas, hydro-power system are just wishful thinking from people who know so little about them. There is not even a remote possibility of those systems mentioned being economically viable.

Taking into consideration the slow rollout plans and the growing number of unsuccessful solar power sites, tower companies are skeptical about the solar system as a viable solution. On the basis of recent reports, less than 0.5% of telecom sites have been converted to solar/DG hybrid system.

How to Move Forward?

Very few are aware that the mobile operators are paying for the monthly energy bill and not the tower companies. They are not in a hurry to switch to solar because they are not financially affected by the consistent rise in diesel price. DoT and Trai must insist that stakeholders switch to solar system, otherwise it may drag on until the damage is irreparable.

To prevent a disaster from happening in the telecom sector, DoT and Trai must mandate that all new sites coming on stream should be powered by solar systems without using diesel. This will at least arrest the situation from getting bad to worse.

DoT and Trai only need to kick-start the process after a few successful solar sites have been verified with monthly energy savings above 90%. The stakeholders will automatically embark on solarization of telecom towers.

Tower companies can propose providing power to mobile operators at the current energy cost, fixed for the next 10 years in new sites. This sustainable model may eventually turn things around for tower companies because it is new and more lucrative revenue source other than just the monthly rental.

The successful application of the integrated solar technology in the telecom industry can be replicated in other sectors like consumer, industrial, and commercial projects. This could be the beginning of a solar revolution which may eventually overtake the IT revolution.