The turning point for renewable energy is round the corner. Indian cleantech market analysts Bridge to India state that 2016 will be the year when rooftop commercial solar power will achieve grid parity with conventional energy in India. Although no legally binding agreement was signed at the Paris climate change conference, it has done a world of good for boosting renewable energy. Despite the price of coal and other fossil fuels hitting the rock bottom, the growth in solar power adaptation has remained steady.
Year-on-year data on the share of various power sources in India clearly indicates that coal is steadily losing its dominant share, while renewable energy sources have gained rapidly. While the installed capacity of solar power has surged, the per-unit purchase price has collapsed to reach closer to the price of thermal power.
Installed Power Capacity in India
Year-on-year data on the share of various power sources in India clearly indicates that coal is steadily losing its dominant share, while renewable energy sources have gained rapidly.
Figure 1: Installed power capacity in India
While the installed capacity of solar power has surged, the price of power has climbed down to reach closer to the price of thermal power. The current solar purchase price of Rs.6.5 per unit is marginally above the price earned by coal power plants in Delhi at Rs.5.71 per unit.
Figure 2: Rising solar power capacity in India
Falling Prices of Solar PV Panels
Similarly the cost of equipment is falling steadily in recent years, enabling solar power companies to expand their capacities. However, there is a threat of anti-dumping duties being imposed on Chinese solar PV modules, which is the main supplier for the Indian market. The crystalline PV module prices have fallen from INR39 per watt in 4Q2013 to INR35 per watt in 4Q2013.
The National Solar Mission has been the biggest boost for solar power market to develop since 2010. Gujarat and Rajasthan have emerged leaders among Indian states to offer incentives through state policies. However, Maharashtra has been quite slow in promoting this market, but the new BJP-led government is expected to push forward with the pending projects.
Opportunities for Market Entry by SMEs
The techno-economic feasibility of solar PV projects are now beyond dispute. Numerous private and state-owned companies have entered the market since 2010 and the market is becoming crowded. Yet, three key opportunities are still available for newcomers. For further details, please submit your contact details and download our e-book on Opportunities in Solar Power in India: