Technological breakthroughs and economies of scale will make solar power competitive in six years and help India add 67,000 megawatts of solar generation capacity by 2022 – more than thrice the country’s target, according to a report by consultancy firm, KPMG.
“The present trends indicate that the prospects are very bright for solar power to be equal to conventional electricity any time after 2017, said a senior official from the Ministry of New and Renewable Energy.
The report, which will be released soon, says solar energy can contribute 7% of the total power needs of the country by 2022, helping cut coal imports by 30% or 71 million tonnes a year. This would result in saving of USD 5.5 billion in imports per year from 2022 onwards, it said.
The projected increase in solar capacity can reduce India’s carbon emissions by 2.5%, which is a tenth of the 20-25% reduction India has volunteered at the international summit on climate change in Copenhagen, KPMG says.
It is estimated that solar power prices would decline at the rate of 7% per annum over the next decade. Efficiency improvement due to technological advancement and emergence of low cost manufacturing are likely factors that would aid the continuing trend.
Sates like Rajasthan, Gujarat and Tamil Nadu are expected to take the lead in this direction reaching the grid-parity earlier. Apart from conducive policies in place, other reasons being higher insulation (measure of solar radiation energy received on a given surface area in a given time) and having little reserves of coal.
Though India may add up to 17 gigawatts (GW) of solar power by 2017, the cumulative installation between 2017 and 22 can jump three fold to 50 GW, the consultancy says. Last year, the Ministry of New and Renewable Energy had opened up competitive bidding for phase-1 of the Jawaharlal Nehru Solar Mission.
Bids were received for prices being quoted between Rs 10-13 kw/hr for both Concentrated Solar power and solar photovoltaic projects. Against solar power, the conventional power at grid level is available at Rs 4 kw/hr whereas the average cost passed on to the consumer in 2010-11 is estimated to be as high as Rs 5.42 kw/hr factoring in the transmission and distribution losses.
To achieve the grid parity for solar power over the next 5 years, the government must take measures to sustain the momentum in growth. A fund to support states in meeting the renewable purchase obligations can take the sector to the next level.