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Will the sun shine on solar power in India in 2013?

According to reports, it was never the lack of sunshine but high costs that prevented India to tap solar power. That economics is changing fast, making solar power a viable option. Says Kameswara Rao, leader, energy, utilities and mining, PricewaterhouseCoopers (PwC) India, “There is considerable excitement on account of decline in capital costs over the years which has brought grid parity closer to reach. ” From a peak of about Rs 18 per unit three years back solar power is now under Rs 11 per unit, making it a viable alternative, say, to burn diesel to run gensets during load shedding. Besides, solar is clean, green and the fuel, Sun light, is free and plentiful across the country.

In  an interview with ET , Mr Rao, talks about the prospects of solar power in India. Excerpts:

ET: What’s your outlook on the solar power industry in 2013?

Mr. Rao: Solar power has grown rapidly in the last two years to reach installed capacity of 1047 MW (November 2012), and a further 610 MW is expected to be added by March 2013. The off-grid segment is more modest at 100 MW installed capacity and dispersed across several smaller sites. We expect to see strong growth in 2013 given that many states have initiated strong policies to attract solar power units.

ET: By when do you expect solar power to reach grid parity (costs similar to conventional power)?

Mr.Rao: There is considerable excitement on account of decline in capital costs over the years which has brought grid parity closer to reach. However, it must be remembered that solar power remains an expensive proposition and it might take 4-5 years of scaling-up and cost reduction before this can be achieved. For this reason, the sector will need concessional financing, supportive feed-in tariffs, and capital subsidy in upstream manufacturing in order to attain the goal.

ET: Is there likelihood of more solar power installations over the next year?

Mr. Rao: The solar sector has attracted a lot of interest and many states such as Rajasthan, Gujarat, Madhya Pradesh, Karnataka and more recently Andhra Pradesh and Tamil Nadu have announced aggressive policies to attract investments. The tender for NSM Phase 1 (batch 1 and 2) has been very successful and attracted wide local and overseas interest.

From the National Solar Mission alone, we expect 9000 MW of solar projects by 2017. Tamil Nadu and Andhra Pradesh have targeted 3000 MW and 1000 MW and other states have set similar targets as well. This will not be easy to achieve given the challenges in land acquisition and financing but we expect to see a new addition of at least 1500 MW from state policies alone in the medium-term.

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