Why the Steel Industry Needs to Consider Installing Solar

India boasts the world's second-largest steel industry and is the third-largest consumer of steel. The steel sector is a cornerstone of India’s economy, contributing around 2% to the GDP and employing approximately 2.5 million people in steel and associated industries. However, the steel industry is also a major contributor to CO2 emissions, making it imperative to explore sustainable alternatives. One promising solution is the adoption of solar energy.

Current Challenges in the Steel Industry

The steel manufacturing process is energy-intensive, requiring substantial electricity for the operation of sinter plants, calcining plants, coke ovens, blast furnace blowers, basic oxygen furnaces, oxygen plants, slab casters, and rolling mills. Presently, coal remains the primary source of electricity in this sector. Many iron and steel companies in India have established captive electricity plants to meet their power demands, with coal, natural gas, and diesel accounting for 91%, 7%, and 1% of this captive generation, respectively.

Consequently, the industry emits 2.6 gigatonnes of carbon dioxide (Gt CO2) annually, representing 7% of global energy system emissions. This figure surpasses emissions from all road freight combined, underscoring the urgent need for cleaner energy solutions.

The iron and steel industry in India is regulated under the Environment Protection Act (EPA) and Environment Protection Rules & Regulations, necessitating the installation of pollution control equipment and adherence to prescribed standards for air, noise, and water pollution. In this context, solar energy presents a viable alternative.

Benefits of Adopting Solar Energy

• Cost Savings : Switching to solar energy can lead to significant cost savings. Solar power provides a stable and predictable energy source, reducing reliance on fluctuating fossil fuel prices. By installing solar panels, a steel company can save up to 80-90% on energy costs, with the initial investment typically recoverable within 4-5 years.
• Energy Independence : Solar energy enables steel factories to generate electricity on-site, reducing dependence on external energy sources and minimizing the impact of energy supply disruptions. Companies can opt for off-grid or hybrid solar systems with battery backup to ensure a continuous electricity supply.
• Environmental Impact : Solar power is a clean and renewable energy source that generates minimal greenhouse gas emissions and air pollutants compared to traditional fossil fuels. By adopting solar energy, a steel factory can significantly reduce its carbon footprint, contributing to climate change mitigation. Additionally, this can enhance the company’s ESG rating and foster a positive public image.
• Reduced Operating Costs : Solar panels require minimal maintenance, leading to lower operating and maintenance costs over the long term. This results in improved financial stability and predictability for the steel factory.
• Long-Term Investment : Solar panels have a long lifespan, typically ranging from 25 to 30 years or more. This one-time investment can provide a reliable and stable energy source for decades.
• Government Incentives and Tax Benefits : Governments often offer incentives, grants, and tax benefits to encourage the adoption of solar energy. These incentives can significantly reduce the upfront costs of installing solar panels and expedite the return on investment. In India, businesses can benefit from a 40% accelerated depreciation on solar assets.

Common Solar Solutions for Steel Factories

• Captive Solar Plant (Roof/Ground Mounted) : Steel factories with sunlit roofs can install solar panels on top. Many companies also opt for ground-mounted solar plants to meet their energy demands.
• InRoof Solution : The In Roof solution transforms solar panels into a leak-proof roof, allowing companies to convert their roofs into mini solar farms.
• Open Access Solar : Companies with a sanctioned load of at least 100 kW can buy solar energy directly from the open market. This approach enables consumers to pay only for the energy consumed without investing in installation.

Conclusion

Adopting solar energy in the steel industry is not just a sustainable choice; it’s a strategic one. As solar panel manufacturers continue to innovate and government incentives remain favorable, the steel industry is poised to benefit significantly from this clean energy revolution. Embracing solar energy can help the steel industry reduce its carbon footprint, comply with environmental regulations, and secure a sustainable future.