Indian solar costs drop 61% in three years

19 March 2014

NEW DELHI: The world's third greatest energy consumer is making significant in-roads into the solar market, with a 61% drop in the cost of Indian solar production over the past three years.

The Indian government is allowing the market a strong stake in solar energy expansion, and recently Madhya Pradesh held competitive bidding for solar development, the Economic Times of India has reported.

Phase two of the National Solar Mission saw 53 companies place bids for 2,170 MW of solar, three times the 750MW that were advertised.

By enabling competitive tenders for solar power, India is differentiating itself from the European-style subsidies model.

The Asian giant believes that by incentivizing corporate participation the goal of 20,000 MW solar capacity by 2022 will be realized.

S.R. Mohanty, Secretary of the Ministry of New and Renewable Energy, awarded the contract to Himgiri Energy Ventures based on their offer of solar supply to the state grid at Rs 6.5 a unit, an unprecedented price drop which cut 13% off the previous lowest solar power supply cost.

In addition, this new market value for solar power makes it just 14% more expensive than thermal.

Aside from the competitive bidding scheme, the Indian government has announced plans to build the world’s largest solar plant, capable of generating 4GW of power capacity. The Ministry of New and Renewable Energy has stated that the first phase of construction of the plant will cost approximately US$1.08 billion.

Jarnail Singh, Indian Programme Manager for The Climate Group, responding to the solar energy growth, said: “The adoption of good quality solar products among rural populace in India could be accelerated manifold by increasing levels of consumer awareness and innovating within the domain of customized finance for poor customers. After all, the off-grid market is one of those very few where the buyer is poorer than the seller.

"Some of these innovative market based mechanisms are already being tried under Bijli – Clean Energy for All initiative by The Climate Group in Maharashtra and West Bengal. Bijli has partnered with Selco and SwitchON (the non-profit arm of ONergy) to enable a low-cost line of credit to poor customers in these states with a target to serve at least 3,200 families.”

Image: Jarnail Singh, full Photojournal available to view here

Related News:

India secures a €200 million EIB loan to expand its clean energy projects

The Climate Group partners with SELCO India to provide clean energy solutions for rural communities in Maharashtra, India

By Alana Ryan




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