According to the available information from the Central Electricity Authority (CEA), 5791.54 MU of electricity has been generated by cumulative solar installations in India between April 2016 to September 2016. Table 1 indicates the change from the previous year 2015 – 2016.
Table 1: Electricity Produced By Cumulative Solar Installations In India
Also, let us look at the comparative percentage of solar energy produced during the last three years and the current year out of all renewable energy generation during the period (Table 2).
Obviously, both Table 1 and Table 2 show a positive trend as far as the growth of solar energy is concerned. But considering that our country has an ambitious plan for ramping up solar power generation to 100 GW by 2022, obviously we will have to work much harder from today’s 8.63 GW capacity (level).
Although the Indian government is trying hard to popularise adoption of solar power, we are still to achieve a lot. There are several reasons behind that, however, one of the major causes behind slow deployment or adoption of solar energy is – not having the right information on the falling cost of the solar modules. Many of us still feel: though environment-friendly and sustainable, going solar is a costly affair. How far is that true? What is happening globally?
The scenario in the USA
The USA is still considered as the country leading the area of high technology globally. Let us have a look at the status quo there. A recent report from the National Renewable Energy Laboratory (NREL) states that the modeled costs to install solar Photovoltaic (PV) systems continued to decline in the first quarter of 2016 in the U.S. residential, commercial and utility-scale sectors. Driving the cost reductions were lower module and inverter prices, increased competition, lower installer and developer overheads, improved labour productivity and optimised system configurations.
“The continuing total cost decline of solar PV systems demonstrates the sustained economic competitiveness of solar PV for the industry across all three sectors,” says NREL Senior Analyst and Project Lead Ran Fu.
Ran Fu
The modeled costs for the first quarter of 2016 were down from the fourth quarter of 2015 by 6%, 4%, and 20% in the residential, commercial and utility-scale sectors, respectively. The costs fell to $2.93 per watt of direct current for residential systems, $2.13 per watt of direct current (Wdc) for commercial systems and $1.42 Wdc for utility-scale systems for fixed-tilt utility-scale systems, and $1.49 Wdc for one-axis-tracking utility-scale systems.
“Such accurate cost benchmarks are critical for tracking the progress of PV systems toward cost-reduction goals. Because our cost model categorises hardware and non-hardware costs with a high degree of resolution, the results can also be used to identify specific cost-reduction investment opportunities and assess regional levelised costs of energy,” adds Fu.
The new results also highlight the importance of non-hardware, or ‘soft,’ costs. As the pace of cost reductions for modules and inverters has slowed in recent years, the proportion from soft costs – such as labour, overhead and permitting costs – have grown. In the first quarter of 2016, soft costs accounted for 58% of residential system costs, 49% of commercial system costs and 34% of utility-scale system costs.
NREL uses a ‘bottom-up’ modeling method to construct total capital costs by quantifying the typical cost of each individual system, and project-development component, largely through dialogues and interviews with solar industry collaborators. The results represent total installed system costs from the perspective of the PV project developer or installer, including net profit in the cost of the hardware. The benchmarks are national averages weighted by state installed PV capacities.
Solar PV to boom in Africa
According to Adnan Z Amin, Director-General of International Renewable Energy Agency (IRENA), “In recent years, solar PV costs have dropped dramatically and will continue to do so with further declines of up to 59% possibly in the next ten years. These cost reductions, coupled with vast solar potential on the continent, present a huge opportunity for Africa. Both grid-connected and off-grid solar PV now offer a cost-competitive means to meet rising energy needs and bring electricity to the 600 million Africans who currently lack access.”
Adnan Z Amin
According to IRENA’s recent report titled, ‘Solar PV in Africa: Costs and Markets,’ the installed costs for power generated by utility-scale solar PV projects in Africa have decreased as much as 61% since 2012. Today, installed costs for these projects are as low as USD 1.30 per watt in Africa, compared to the global average of USD 1.80 per watt.
NREL U.S. PV system cost benchmarks, from the fourth quarter of 2009 to the first quarter of 2016…
Utility scale solar PV project costs in Africa
Mini-grids utilising solar PV and off-grid solar home systems in Africa also provide higher quality energy services at the same or lower costs than the alternatives, finds the IRENA report. Stand-alone solar PV mini-grids have installed costs in Africa as low as USD 1.90 per watt for systems larger than 200 kW. Solar home systems – which have tripled in Africa between 2010 and 2014 – provide the annual electricity needs of off-grid households for as little as USD 56 per year, less than what they currently pay for poor quality energy services.
Europe and Asia striding forward
SolarPower Europe, the new EPIA (European Photovoltaic Industry Association), is a member-led association representing organisations active along the whole value chain. “Solar is booming and continues to break records in many parts of the world, which gives us reasons to believe 700 GW globally installed solar power is possible by 2020,” says Oliver Schafer, President SolarPower Europe.
Oliver Schafer
As per their market report, called the ‘Global Market Outlook for Solar Power 2016-2020,’ a total of 229 GW of solar power was installed in the world by the end of 2015 – an over 45-fold market increase in only 10 years.
China, Japan and the US led the world’s solar market in 2015, with China and Japan alone responsible for 50% of newly installed capacity. 2015 also marked a growth year for the European solar market with 8.2 GW of grid-connected solar power, the market grew by 15% year-on-year.
In the first quarter of 2016, China alone installed over 7 GW of solar power. Europe became the first region in the world to pass the 100 GW mark of installed PV capacity. “Solar is booming and continues to break records in many parts of the world, which gives us reasons to believe 700 GW globally installed solar power is possible by 2020” says Oliver Schafer, President of SolarPower Europe.
The Indian scenario
In India, in the last two years, solar power generation segment has seen good growth. However, as pointed earlier, it is mostly government’s effort. Of course several private enterprises also have extended their hands to embrace solar power generation. But one of the high potential areas, that is the rooftop segment is still available offering a huge opportunity.
As far as the grid-connected photovoltaics is concerned, the change scenario of the last three years and a half can be seen in the Table 3.
Table 3: Grid Connected Solar Power Installation Capacity Increase In Last 3.5 Years
Realising the less-taped wide potential and to encourage the nation, on 09 12 2016, the Director of the Solar Energy Group under the Ministry of New & Renewable Energy (MNRE), Dr G Prasad has issued an office memorandum. It coveys, “Ministry is implementing the program for installation of grid connected Roof Top Solar (RTS) power systems/projects in buildings/vacant areas belonging to various Ministries/Departments. In order to expedite the implementation, PSUs have been empanelled by MNRE to assist the Ministries/Departments through Project Management Consultancy (PMC).”
Obviously, the good steps which are starting from the ministries now, will take quite some time to be followed by the common citizens. Also, delay in grid connection is one of the main challenges affecting fast acceptance of the Rooftop solar projects. The current policy of MNRE of financing such projects will definitely enhance the adoption of the new rooftop solar projects. One of the recent analyses of Bridge to India points out that effective grid connection and net-metering policies can increase customer adoption rates by up to 50%.
What do the experts say?
“Solar power is becoming increasingly cost-competitive with fossil fuels and distributed solar is cheaper than retail electricity in many countries. In 2016, solar also became cheaper than on-shore wind power in parts of the globe,” says Michael Schmela, Executive Advisor of SolarPower Europe and Lead Author of the SolarPower’s report.
“India’s economy is growing rapidly, and the country has ambitious plans for widespread electrification. Renewable energy resources and technologies have an important role to play in these plans. By reaching out and sharing knowledge between government ministries and mini grid developers, financiers and suppliers, we have been able to offer solutions that make solar power a practical and profitable option to electrify India’s rural regions,” says John Harvey, Project Manager, Ricardo Energy & Environment.
Last year, while approving the $625 million loan to support the Government of India’s program to generate electricity from widespread installation of rooftop solar Photo-Voltaic (PV), and co-financing loan of $120 million on concessional terms and a $5 million grant from Climate Investment Fund’s (CIF) Clean Technology Fund, Onno Ruhl, World Bank Country Director in India, said “India is endowed with huge solar energy potential, and the World Bank is strongly supportive of the government’s plans to harness this potential and increase India’s solar PV capacity to 100 GW. Solar PV will not only improve access to electricity, but it will do so in a manner that avoids the environmental impacts of other traditional electricity sources.”
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