Utility scale solar PV price was about 20 Cr/MW in 2004 and have reached to about 15 Cr./MW in 2010 and currently you can get installed a solar PV plant with a single EPC contractor at a price as low as 8 Cr/MW. With current price trends while in recent bids the price of electricity sale through solar has already reached to Rs/7/kWh, this raises a big question that can the solar electricity be available to us at a rate of 5 Rs a unit. The recent reductions in the solar PV project costs have been significant due to 2 reasons.
- The China factor of generating the solar PV modules as well as power electronics at unbelivable cheaper price
- The volumes generated by the markets such as India under the JNNSM.
Both the factor have lead to the price reduction to almost half the price of solar power which was for a long time existing at about 15-20 Cr. per MW figures. Many experts believe that the market has already bottemed out, however the cost of electricity generation from a PV plant is function of not only capital cost but also the financing and O&M costs. While there has been significant reduction in the capital cost per MW of a utility scale PV power plant, there exist a significant in further innovate the ways to reduce the per MW coast of a solar plant.
While the PV module costs are already about 1 $ per Wp, in fact the thin film is today available at a price of about 0.7 $/Wp. The significant gains in the efficiency of thin film modules have recently generated interest in this technology due to low cost, specially the CIGS technology where the efficiency have reached to as high as 12%, this give a hope to the investors to achieve the sale price of about 7 Rs a unit.
The thin film technology has reached to such stage that you need not to have a glass as substrate, the deposition can be made on a polymer sheet as well. This will bring significant reductiojn in terms of module prices. While we can expect the rollable modules in the form of a sheet, this will significantly reduce the price further due to reduced input cost of glass as a material as well the polymer based substrate will be easy to transport without any breakage.
Power electronics which is used to convert the DC output of arrays into high quality AC also cost about 30% of the overall project costs. Since the current inverters fails after the 8-10 years of useful life, there are efforts going on to increase the useful life of the inverters to 20 years. The inverters which are used currently are central inverters of 500 kW- 1 MW capacity, market may see a trends to use smaller inverters as string inverters of 10 -20 KW capacity. The modular nature of inverters will achieve the mass production and this will also lead to reduce the power electronics prices for PV plants.
The mountings/structures, civil works, and other BOS account for almost 20% of the total project costs. There are manufacturers who have already come out with the polymer based structures, which are lighter in weight and have long life and no corrosion problems. Installation of mounting frames takes lot of times, and some of the developers have started adopting the ramming machines which can install soar mounting frames in hundreds of acres in a day. The gestation time has significantly reduced. Already some of the developers have achieved the installation time of 1 MW per month in recent projects.
Tracking systems which cost currently about 10 % of the total system cost, increase the output in the range of 25-30% in energy yeild. some of the developers such as Mahindra solar have tried the tracking systems and have been highly successful to increase their yeild.
While each of these areas could be pursued as a separate task, as a part of cost reduction strategy, we believe that market is yet to innovate the solar and adopt this in a more indiginously fashion. The future looks bright as the cost of generation of conventional power is bound to increase and will reach in next few years to 5 Rs a unit, while the cost reduction in PV technologies will bring the current cost further down and will be available very soon at a rate of 5 Rs. a unit.
Think Solar- The future will be bright