According to reports, the solar energy sector doesn’t have much to show off right now in terms of its contribution to the total power generation in the country, but the recent dramatic drop in its cost of production for power is poised to herald sunny days for the clean energy.
“We will easily achieve the target of 20,000 megawatt capacity by 2022 set by the Jawaharlal Nehru National Solar Mission. But the sector faces challenges from the manufacturing side. But the high interest rate, which is as high as 13-14%, has been a main dampener for businesses to invest,” said Deepak Puri, chairman and managing director of Moser Baer India, at the Pravasi Bharatiya Divas 2012 session on solar energy.
The recent auction for 1,100 mw of solar project held in last December saw bidding prices dipping to as low as 7.49 per unit, which is half the rate that companies accepted two years ago.
“A couple of years from now, we will see solar energy reaching grid-parity level for captive purposes. Rates have come down from Rs 18 per unit to Rs 8.5 level in two years’ time. Even if the capacity required to meet the Renewable Purchase Obligations (RPOs), which is set at 0.25% to 3% of the states total energy requirement, we are likely to see an investment of $50 billion,” said Sanjay Varghese, chief operating officer of Lanco Solar Energy.