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Solar PV installations close to grid parity in India

According to reports, power generation from the country’s solar photovoltaic units is close to attaining grid parity.

While some players say that grid parity has been achieved at the generation level, when compared with power from high speed diesel, naptha or LNG, and with the power tariffs to the consumer, others say that the real comparison is still some way away.

Some of the players in the solar power sector say it has entered an exciting phase where the momentum will gather pace due to policies on rooftop installations, the Renewable Energy Certification Mechanism, enforcement of Renewable Purchase Obligation and huge off-grid market.

Grid parity refers to a situation where an alternative energy source (like wind or solar) can generate electricity at a cost equal to the price of power from the electricity grid. This is considered to be the point at which an energy source becomes a contender for widespread development without subsidies or government support.

Rajya Wardhan Ghei, CEO of Hindustan Cleanenergy, said, “We are already close to grid parity as the cost of modules has come down and the generation cost of thermal and gas plants has gone up due to increase in fuel cost.”

Energy expert and now Chairman of KSK Energy, TL Sankar, said, “The drop in the solar PV installation costs have will only accelerate deployment of this renewable energy source. But when it comes to grid parity, at the consumer point, we are at least couple of years away.”

Amit Mehta, Director, First Solar, said, “If the power generation using diesel and gas is taking into account, there is already parity. It won’t be long before generation using natural gas aligns with this as prices are expected to go up.”

With the country energy demand continuing to grow steadily, the demand-supply gap will continue in the foreseeable future. Therefore, the installations of solar PV units would help meet the requirements to bridge that gap, Mehta said.

The best way to look at solar power generation is the huge advantages this clean energy comes with rather than pure cost consideration. With the cost of setting up of thermal power project now at about Rs 6-7 crore per mw, which is very close to what one needs to install a solar PV unit, the gap is already bridged, Ghei said.

Narendra Surana, Managing Director of Surana Ventures, said, “They are currently supplying power generated from their plant in Andhra Pradesh at Rs 6 per unit and the State utility sells power at more than that price to consumers. Therefore, for us, it works out lower than the grid cost.”

Certain applications such as urban rooftop PV, solar PV are already very close to parity. Using diesel to generate power works out to about Rs 15 per kwh and contains a subsidy component. With the price of gas and imported coal cost set to go up rapidly, the solar PV is already a compelling proposition in most of applications, they contend.

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