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Can Declining Costs Of Pv Modules Make Solar Power A Reality?
Total Articles: 33
Earlier this year in July, prominent ratings agency India Ratings and Research announced that solar power was likely to become cheaper or on par with thermal energy prices over the next two to three years in India touching approx INR 4-4.5/ per unit by 2017-18.
As per its analysis, this expected falls in tariffs was likely to be driven by a decline in capital costs of key components like solar PV modules, increased efficiency and a distinct towards larger solar projects that afforded economies of scale.
According to International Renewable Energy Agency, prices of solar PV panels have declined by as much as 80% since 2008. As per 2015 solar outlook by investment bank Deutsche Bank, solar power generation systems will be at grid parity in up to 80% of the global market by the end of 2017.
Falling PV solar module costs have spurred an increase in installation of solar PV panels. As per the Renewables 2014 Global Status Report, a record 39 gigawatt (GW)-plus of solar PV capacity was added in 2013, which increased total (peak) capacity globally to 139 GW at the end of 2013.
While this is inadequate to generate even 1% of the global demand for electricity, the growth is impressive. Almost half of all PV capacity in operation today was added in 2012-2013, while an estimated 45 GW was added in 2014 alone, bringing the total to 184 GW.
In the Indian context, the India Ratings analysis hints at a strong resurgence in solar power generation installations in the coming years, driven both by the government impetus to generate 100GW of solar power by FY22 (60GW through grid connected solar energy projects) and the rapid decline in the costs of solar PV modules, which are expected to continue for the next couple of years.
The declining costs are also expected to enhance a reduction in solar power generation costs in India thereby increasing the affordability of solar power for distribution companies, effectively eliminating the need for government sops in the form of subsidies or viability gap funding (VGF) in the long term.
The impact of declining price trends is already being felt across the country, given the significant decline in solar power tariffs in recent years with the crucial feed-in-tariffs (FITs) also following suit, most notably in states like Gujarat and Rajasthan which have recorded a decline in the FIT for solar power to about INR 8.03/per unit and INR 6.74/per unit respectively in 2015-16.
Welspun Renewables is a leading player in India’s RE sector with a strong network of solar and wind-based energy projects across the country.
Cheaper PV modules are expected to play an integral role in ensuring a further reduction in solar power generation costs in India
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