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Here comes the sun: Indian consumers go solar as costs plunge
Time:2016-11-18 Hits:

Although it still faces issues, solar power is competitive with newly-built thermal, hydro and nuclear power plants.

The price of solar energy has fallen by half over two years, with prices dropping from Rs 10-12 per unit to Rs 4.63 per unit in 2015, the price at which Sun Edison, a US company, offered to supply electricity in Andhra Pradesh recently, closely followed by another project.

At these levels, solar power is competitive with newly-built thermal, hydro and nuclear power plants, although it still faces issues of being available mainly when the sun shines. Nevertheless, these rates are encouraging a growing number of consumers to bypass India’s creaky electricity grid and directly go solar.

These prices will also boost Prime Minister Narendra Modi’s ambitious solar-energy plans. Of a target of 175 giga watt or 175,000 MW of renewable energy capacity by 2022, solar power will account for 100 GW, as Factchecker reported,India currently has 5,000 MW of solar power installations; so the government’s target is a 20-fold jump over the next seven years.

“Rooftop solar costs around Rs. 6.5 per kWh (kilo watt hour) for systems of 200 kW or more,” said Dr Tobias Engelmeier, founder and director of Bridge to India, a solar-power consulting firm. “With batteries, you are looking at a doubling of the electricity cost. This currently makes no sense vis-à-vis grid tariff. People are trying to replace diesel gensets (which cost more than Rs 15 per kWh), but this is still early stage.”

The shift of industrial and commercial users from grid electricity will mean that high-paying customers will continue to leave state-owned power-distribution utilities, which lost Rs 62,154 crore ($10.3 billion) during 2013-14.

The Central Government appears to recognize the need for energy reform and has recently launched a scheme – the Ujjawal Discom Assurance Yojna – to restructure the debts of power distribution companies and reduce the cost of electricity.

However, these measures do not address the energy stolen or lost and given to farmers free or almost free. These losses burden the taxpayer and prevent distribution and generation companies from investing in new infrastructure or technologies, such as solar power.

 

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