According to reports, last month, the Australian State of Queensland witnessed a historic event. Electricity prices dipped to near zero. The reason: solar power generation by individual buildings decreased the demand for electricity from coal-powered plants.
While solar generation may have become viable in Australia, India still has a long way to go as the challenges are numerous — infrastructure and lack of connectivity among others.
However, the same challenges also provide a huge opportunity for solar power in regions facing poor grid access.
Despite abundant raw material — sunshine — the country has still not been able to scale up solar power production, since focus still remains on generation from fossil-fuels. The country currently generates about 2,700 megawatts (MW) of solar power (mainly PV, and 50 MW of solar thermal. Another 100 MW of thermal is waiting for proper sunshine), a miniscule fraction of the installed capacity of 249.488 gigawatts (GW).
India aims to add about 1,100 MW this year to the solar capacity. By 2020, the country aims to have over 20,000 MW of solar power, still lower than its actual potential of 1,00,000 MW, according to the Ministry of New and Renewable Energy.
Besides, infrastructure tariff is an issue with this source of energy. Currently, solar power tariffs stand at about ₹6.50-7.50 a unit after an about 30 per cent subsidy. Without subsidy, the rates would be about ₹ 10/unit.
Chandra Bhushan, Deputy Director General, Centre for Science and Environment (CSE), said, “The issue with coal is there are a lot of externalities — such as pollution, forest destruction and cheap land — that are not calculated by traditional economics, which are a form of subsidy.”
Currently, the cost of producing power from coal is almost a third of that from solar.
However, a study conducted by GreenPeace estimates, “Assuming a fairly conservative five per cent per annum reduction in the cost of solar power and a six per cent per annum increase in grid prices, parity will be reached in all the tariff segments by 2018.” Following this, grid prices are actually likely to go up. Anand Prabhu, Energy campaigner, Greenpeace, said, “The coal sector gets direct and indirect subsidies right from coal mining, transportation, land acquisition and generation, it goes the same for renewable energy technologies as well. Even if the direct subsidies are nullified for both (coal and renewable power), still the renewable technologies such as wind and solar end up being cheaper in the present and long run as coal-based power continue to get expensive in the future.”
While the Government is keen on developing Ultra Mega Solar Power Projects, the industry believes the true potential lies in setting up solar panels on rooftops to generate electricity on a smaller scale. This is also the model that has become popular in developed countries.
Echoing similar thoughts, Piyush Goyal, Minister of State for New and Renewable Energy, recently told Parliament, “The Delhi Government is taking steps to promote the grid-connected solar rooftop power…include formulation of a solar policy for Delhi, issue of suitable orders on solar power tariff, net metering and grid connectivity by the regulator.”
The Indian Solar Manufacturers Association also points to the viability of the rooftop market but said that incentives such as rebate on electricity bill and property tax help give a further fillip to the industry.