Solar pv development in India has come up in a big way .In 2009 we had merely 10 MW of installed capacity, today we have reached to an installed capacity of about 1.1 GW. And it is expected that now in the future we will be able to add 1 GW every year for next 3 years depending on the government projections to install solar pv. In fact India has become 6th largest installer of solar peeve in the world. The major reason for this achievement has been the decline in the price of solar pv technologies and it is expected that this decline will continue in the future and bring the solar to grid parity sooner than what people forecasted that we will reach grid parity by 2020
The major reason for instant decline were the increased competition between the suppliers and introduction of competitive price design (reverse bidding)..In fact solar pv is currently competitive in some of the consumers where there dependency is very high on diesel power generation.The economic attractiveness of solar is specially to the commercial/institutional consumers category having higher weighted cost ,and solar becomes an attractive proposition to these consumers without any financial incentive ,although most of the states have come up with net metering / Rec (renewable energy certificates) applicable to 100KW and above capacities which makes the institutional/commercial to vouch for some renewable energy service company (Resco companies). Soar p v rooftop system also provides to the commercial/institutional, the accelerated depreciation benefit which is about 300MW in case of these consumers.
If we consider these benefits, the so called grid parity is already there to these types of consumers. For example, the Average Cost of electricity to retain consumers in some the state is about 7.5-8 kWh and the LCOE of solar pv to these consumers is 10 Rs/kWh. In case we consider the AD benefit to these consumers the LCOE with AD brings solar power at par with the grid parity to consumers as the LCOE reaches close to the tariff charge by the grid to the consumers. In fact some the state government is in the process of implementing FIT (feed in tariff) back to the roof top segment of solar pv so that the tail-end generation utility may relieve the grid through incremental investment which is required to strengthen the transmission and distribution system.
The LCOE of a solar pv system is continuously declining in proportion to the capital cost of the pv system. There are two major factors which the LCOE of solar include. These factors are : the capital cost and the interest.The LCOE can be brought down significantly if the end component can be brought down in the pv universe in the form of soft loan.Hence on one side the market has controlled and brought the market price to 7kMW.If the soft loan is provided to the investors, it does not require any other funding to bring solar power to grid parity.It helps to focus to provide soft loan to pv investor rather than providing any other form(incentives.subsidies).
Article by: Dr. Sanjay Vashishtha & Sonu Nair