India: solar cheaper than grid power

04. April 2013 | Global PV markets, Markets & Trends, Applications & Installations | By:  Vera von Kreutzbruck

Solar power is cheaper than grid power for commercial consumers in Maharashtra, Delhi and Kerala, even with no subsidies, according to a quarterly report published by consulting company Bridge to India.

Satelite image India

Solar power is cheaper than grid power for commercial consumers in Maharashtra, Delhi and Kerala, even with no subsidies.

The report also states that commercial consumers in other states such as Andhra Pradesh, Odisha, Gujarat, West Bengal and Rajasthan can profit from reduced energy costs with help of the subsidies.

The New Delhi-based consulting company analyzed tariff data from the State Electricity Regulatory Commissions (SERCs) and compared it with the Levelized Cost of Energy (LCOE) for solar power.

With respect to the calculation method used to make these future projections, Bridge to India assumed that the tariff for grid power will remain constant for a 20 year project lifespan and that the capital cost of a 100kWp rooftop project will be INR 8.5m (US $ 170,000, € 130,000), equity participation 30%, interest rate for debt at 12.5% and the internal rate of return (IRR) expectation on equity 13%.

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Sid Panda

Sunday, 07.04.2013 08:13

These figures are very conservative. Funding need not occur at 12.5% pa, it can usually be arranged at 4% or less upto 85% of EPC value. Considering grid supplied electricity is available at least sporadically, and that solar energy is available during peak consumption hours during the day, one can do without significant battery storage. Further, as concepts like electricity banking through the grid take root, it will be possible to use the grid, through a two way meter as the storage, and draw electricity at will. With a 15% efficiency poly-crystalline panel, a rooftop installation should be eminently do-able at INR 25,000 per KW. 10 KW of rooftop power therefore works out 2.5 lakhs, rather than the 8.5 lakhs quoted here.

If electricity consuming entities use solar to augment their electricity consumption and use resource storage rather than electricity storage, which is usually relatively inefficient in batteries, solar power can easily be made available beyond sunlight hours.

If you have a requirement, do contact me on 8895493094 or Funding at interest rates below 4% is available for projects larger than 5MW. For larger projects, it can drop to 2.5-3%.

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