Solar Energy without any Subsidies become a Reality in India

Solar energy in India has been driven by subsidies given by the central and state governments. However, the sharp reduction in solar system costs have made it possible for it to compete with fossil fuel electricity prices now. The first case of a large scale plant to be built without subsidies is coming up in Andhra Pradesh. This 6.5 MW plant is being built by one of India’s biggest media groups – Eanadu. The European solar manufacturer Renewable Energy Corporation (REC) is going to supply the solar panels for this plant.

AP is highly power deficient like other southern states in India which are not connected to the national grid. Massive governance and regulatory problems have led to a situation where power deficiency in these states has reached 30%. Solar power has become cheap enough for industries to opt for such plants on their own merit. It is possible to generate solar power at Rs 6-7/ Kwh which is comparable to the retail prices today. Solar power has an added advantage that they are reliable and under your own control. Diesel gensets are not only hugely polluting but have become very expensive, with rupee depreciation and sharp increase in the price of crude oil.

Also transporting massive amounts of diesel everyday to fill up the gensets is a logistical and costly issue. I think that solar power is going to see increasing adoption by corporate, looking for a reliable source of power whose costs does no escalate with time. Solar power has reached the tipping point where it can compete with fossil fuels in a large number of places. I expect that solar demand will continue to increase at 20% in the next 5 years globally.

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