Imagine a time when banks and their branches used to depend on diesel gen-sets for their power back up requirements. This was more so in the hinterland where they had to contend with power cuts lasting four to eight hours a day and ended up spending about ₹20 per unit. A number of rural branches continue to do so.
During this phase banks had few options, with the most obvious one being the use of the UPS system. But this again was dependent on electricity supply from the grid to charge the unit so that it could be used during outages.
After a taste of different power back up solutions, bank branches seem to have zeroed in on solar photo-voltaic systems. These help not only in power back up but also reduce the costs incurred on electricity.
Another major plus, points out Vivek Subramanian, Executive Director of Fourth Energy Partner, a Hyderabad-based company offering solar solutions to banks in particular, “is building redundancy and ensuring there is no disruption to critical banking infrastructure, including computers and ATMs.”
So, where there is inadequate grid power supply, solar has become a mainstay, particularly in some of the ICICI Bank branches, where we have set up units, Subramanian explains.
Setting up solar PV rooftop units brings down the power bills significantly. Depending upon the location of the branch, the power tariff could range from ₹6-7 per unit and may go up ₹14 per unit, the latter in case it is located in a metropolis like Mumbai. As against this, a solar PV unit helps secure a unit at ₹5.
“Every establishment seeks ways to bring down costs, be it electricity or other regular costs and banks are no exception. By way of reverse engineering, we are able to integrate the existing battery based systems with solar power, enabling banks to reuse their existing infrastructure,” he says.
About two years ago not a single branch of ICICI had a solar PV unit. Now they have over 430 branches powered by sunlight. Axis Bank and Andhra Bank have also followed suit.
Currently banks are using two models to shift to solar. Either they invest in the project upfront and get it implemented, called the ‘capex model’, or they seek third party investment, where the chosen firm implements the project and supplies power to the bank branch. This is known as the ‘opex model’.
Increasingly it is the latter that is gaining popularity as more and more bank branches prefer not to sink in their own funds. While in the case of the capex model the cost of power works out to about ₹5 a unit, in the latter it is around ₹6-7 per unit. Significantly, this will be available at the same price for over 25 years while the cost of energy supplied from the grid is likely to go up over the years. No wonder the choice is to bank on solar.