2013: Decentralized Solar PV
electricity reaches grid parity in India
Report by Bloomberg New Energy Finance
Energy cheaper than the national grid
The largest solar photovoltaic power manufacturer in India is expanding its business building plants for customers, and forecasts that offices and factories will be paying more for grid power than solar by 2016 in most Indian states.
Solar installations for commercial and industrial energy consumers, such as cement factories, information technology parks and car manufacturers, seeking to generate their own power represent a market of about $1.3 billion, according to Tata Power Solar Systems Ltd., a unit of India’s biggest industrial group.
The company is seeking to diversify from making panels after an oversupply from Chinese competitors crushed prices globally and idled Indian factories. Customers for whom it has already completed solar plants for self-generation include Maruti Suzuki (the country’s biggest carmaker), Dell and IBM.
“We are seeing a huge uptake as we get closer and closer to grid parity. Corporate customers are coming to us to install solar on their rooftops or land on the side of their factories because it can provide energy cheaper than from the grid.”
- Ajay Goel, CEO
The investment can pay for itself in a year if the customer is able to claim tax depreciation benefits or about four years if they cannot. The economics improve further when businesses calculate the cost of diesel burned during India’s daily blackouts. Diesel generators cost about 17 rupees per kilowatt-hour to run, more than double the cost of solar.
Commercial consumers such as hotels and shopping malls, which pay the highest rates for electricity from the grid, can already generate solar power cheaper in a tenth of India’s 35 states and territories. By 2016, that’ll be true in 60% of India’s states and territories, and if government subsidies are considered, the number will increase to 80%.
In India, the rate paid for electricity delivered by the national transmission network differs depending on the type of consumer and the location. On average, the tariff has risen 15% since 2010 to 4.6 rupees a kilowatt-hour, according to data from the Central Electricity Regulatory Commission on short-term power sales. In the same period, the average cost of solar energy fell 39% to 6.9 rupees per kilowatt-hour.
♦ Publ. here 21.6.2013