Solar-electric boats – benefits & requisites for faster adoption in India

Imagine a world where the electric power generated from green sources runs the entire transport system. Yet, while vehicles and rail have made significant progress, boats have only made initial movement in this direction. This article by Sandith Thandasherry discusses the need and recommendations for promotion of electric propulsion systems in marine transport.

Electric boats are those vessels with electric propulsion that enable the ship to move. They could have other systems apart from this. Once solar panels on the boat provide energy for the electric propulsion, it is called a solar-electric boat or only solar boat. Globally, the market for solar and electric leisure boats has begun to take off. In 2020, there were 15,000 such boats sold. It is expected to grow to 70,000 vessels and a total market size of $1.4 billion by the end of this decade, says researcher IDTechEx.

Why promote solar-electric boats?

There are multiple reasons the government should boost the adoption of solar-electric boats in the country:

Environmental – Shipping (inland and seagoing) contributes 1.7% of the total greenhouse gas emissions. Replacing diesel or petrol consumption with solar energy directly benefits the cause. 

Comfort – As a commuter, a ride in a diesel ferry would reveal the issues one faces in this mode of transport – noise, vibration and smell of fuel that a solar-electric ferry would eliminate.

Low OPEX – There are three reasons why the OPEX is significantly lower for solar boats. They are – cheap energy from solar panels, low energy cost from grid stored in batteries, and low maintenance cost of an electric propulsion system. Their combined impact results in significantly lower OPEX for solar boats when compared with conventional petrol or diesel boats. In addition, if we compare to diesel boats made of wood or steel, there is an additional reason why OPEX is lower in solar boats – efficient design.

Low Cost (TCO – Total Cost of Ownership) – Although solar ferry boats are 30-50% more expensive than diesel ferries, with considerably low OPEX, the TCO of a solar ferry is less than half of a diesel ferry for the twenty-years lifecycle. [1]

Economics – Countries that import crude oil will have foreign exchange (FOREX) savings by this shift. This is even though they have to import lithium and solar cells. In an example of 75 passenger ferry, the total savings in foreign exchange is just over a million dollars in its twenty-year life cycle. [2]

Safety – Although safety is essential in all boats, it is more likely to be cared for while building modern vessels like solar boats. 

What can the government do to promote solar-electric boats?

There are multiple ways for supporting this goal for increased manufacturing and deployment of solar-electric boats. They are grouped into the following categories and listed.

Increase in demand

Policy to push for solar-electric boats in government-controlled operations – In Central government, these are in defence, home, port and shipping ministries. In the state, they are in transport, tourism and port ministries. The push can be prescribing the percentage of new vessels to be solar-electric. Many different types of ships, such as passenger vessels, RORO vessels, pilot boats, harbour crafts, patrol boats, tug, supply vessels, fishing boats, and short-haul cargo vessels can use electric power train.

Policy to push for solar-electric boats in eco-sensitive regions – Many ecologically sensitive locations like lakes, dams, and forest areas must ban diesel and petrol boats to protect the ecosystem. Some of the prominent sites are Chilka lake, Sunderban delta, Ganga river, and Statue of Unity. It can also be done in steps – initially for new boats, only granting permission to solar-
electric ones and provide a phase-out plan for existing vessels.

Reduction in Cost

FAME like support – The FAME scheme provides a handholding to ensure increased adoption of electric vehicles. Department of Heavy Industries can also bring out a similar scheme or extend the same to promote solar-electric boats. The key driver for the incentive is the battery size.

GST as an incentive tool – In vehicles, electric vehicles enjoy a lower GST rate of 5% compared to diesel and petrol vehicles at a much higher GST rate of 18 and 28%. In boats, both solar-electric and diesel or petrol have the same GST rate of 5%. A difference in rates would provide an incentive to the customers.

Shipbuilding subsidy – The shipping ministry offers a shipbuilding subsidy of 20% of value to the shipyards when building commercial vessels over 24 meters in length. The same support can be extended to solar-electric boats for a lower length requirement, say 12 m, to cover most solar vessels.

Overall boost to the boatbuilding industry

Working capital support – The nature of the boatbuilding industry is different from the automobile industry. Unlike large centralised manufacturers in the road vehicles, boatbuilding is a fragmented industry with mostly MSME dominating the manufacturing. On top, most boats are custom built after order and usually take about six months. It means that the typical problem of all MSME – access to finance and low financial cost, is the biggest impediment to the growth and survival of the boat builders. The government must come up with better schemes to remove this barrier.

Govt. PSUs and payment stages – This issue is connected to the earlier problem of working capital. The central government departments and PSUs have a habit of structuring the tender with skewed stage payments that significantly increase the working capital. These measures, unfortunately, favour big shipyards at the cost of MSME participation. The central government must give clear instructions to the PSUs to keep stage payments against milestones like many state government projects. 

Tender gaming to favour imported substitutes –  There are multiple government schemes to promote MSME, MakeinIndia, and StartupIndia. However, the government PSUs have numerous times structured the tender terms to favour foreign suppliers at the expense of local manufacturers[3][4]. This behaviour must be severely dealt with so that no PSUs get away with such irresponsible behaviour.  

Technology development

EU Grant like support cutting edge technology – A very successful development model, especially frontier ones, is by supporting such projects in the way of grants. The EU grant is a very successful model. Most of the innovative solar-electric boat projects happen in Europe for this exact reason. In absence of such support, only those technologies and applications that have proven their commercial success in those countries will be implemented here. The firms in India will always be one step behind.

About the author

Sandith Thandasherry – Founder-CEO, Navalt Solar & Electric Boats. Aspires to transform marine transportation the way Tesla has done for roads.

References:

[1] – Sandith Thandasherry, ‘Economics of ADITYA – India’s First Solar Ferry’, IEEE India Info. Vol. 13 https://site.ieee.org/indiacouncil/files/2018/11/p38-p45.pdf 

[2] – Sandith Thandasherry, ‘Solar-Electric Boats – Life Story’, IESA Publication

[3] – Sandith Thandasherry, ‘Not easy for MSMEs to be Aatmanirbhar’, https://www.thehindubusinessline.com/opinion/not-easy-for-msmes-to-be-aatmanirbhar/article32405631.ece 

[4] – Sandith Thandasherry, ‘How Navalt was excluded from Kochi Water Metro Project’, https://sandith.in/2020/09/13/how-navalt-was-excluded-from-kochi-water-metro-project/ 

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