Why Solar Power Will Expand 20 Times In 8 Years

There is good news on the solar energy front. Till recently, the very high cost of the photovoltaic (PV) panels, used to be a serious hindarance in their wider usage. It is reported that the cost of PV modules have now reduced by about 80%, in the last  five years and in 2011-12,they fell by as much as 30%.

This has resulted in the cost of solar power coming down significantly. It is now at par, with power generated from new  coal based plants. Thus both solar and coal power now will cost same to produce. This has tremendous significance for

India, which has to import ,nearly 80% of its petroleum requirements. Inspite of having, one of the largest coal reserves in the world, its utilisation has not been good and is currently embroiled in a scam.

The expansion of solar power in India is uunbelievable. From an insignificant capacity of 20 MW in 2010-11, it has simply exploded to 940 MW in 2011-12. The major reason is the steep drop in prices of PV panels and modules. 

This has resulted in grid parity a term used in solar power industry, which simply means that the cost of electricity generated from sun's rays and that  generated from coal, gas, wind and hydro plants are almost equal. This is a big breakthrough for solar power industry. It provides a huge oppurtunity  for installation of  solar power stations across the country.

The biggest advantage of solar power is that it requires, only one time investment for land and PV panels. Its "fuel" is sunshine which is freely available and not subject to availibility and price variations. It does not need to be transported as it is available every where, though in some areas there may be some days of less intensity. Compared to this, the


cost of setting up power generating stations on other fuels is costly, requires larger manpower for operations, needs frequent maintainance, and the fuels are increasing in cost every year and may have to be transported from long distances. Also, the issue of environmental pollution in case of coal plants is there, as against nil pollution from solar power plants.

The Government has set up a target of adding 20,000 MW solar power capacity by 2020 under the Jawaharlal Nehru National Solar Misssion (JNNSM). The private sector has already started increasingly investing in it and during 2011, invested a sum of nearly Rs 20,000 crore.

The cost of generating a unit of solar energy was around Rs 18, three years ago. It has now come down to Rs 7.49 per unit in form of the lowest bid in an auction for a 5MW plant under JNNSM in December 2011. The PV panels form about half the cost of a solar power plant. Thus the nearly 80% reduction in PV costs has resulted, in solar electricity  competing with new coal and other fuel based plants.

Currently, Germany is the largest generator of solar power  in the world. It is the massive subsidies provided by the Chinese government to its indegenous PV panel manufacturers that has brought down their prices significantly. However, indian manufacturers are in trouble due to stiff Chinese competition.

But one thing is now certain. The solar power generation capacity  is going to expand  significantly, because it is pollution free, thus enjoying a green energy status and will continue to attract increasing support and funding from both governments and international funding agencies in the years to come.



Article Written By vks1000

Am a retired professional who is now into education of International Business and management topics. I enjoy writing and like reading on politics,economics,management and films. I take life as it comes and try to keep myself busy with a variety of activities.

Posted on 26-06-2012 27 0

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