India is set to nearly double its solar power generation capacity in the ongoing financial year and comfortably exceed its target of adding 1.8 GW of extra capacity during the year.
According to numbers obtained from various government sources, the country is all set to end the current financial year with a total solar power generation capacity of about 6 GW.
In comparison, India had only 3.5 GW of operational capacity in February of 2015. Moreover, the performance and efficiency of solar PV plants that have been put up under the National Solar Mission has also turned out to be better than global average.
The performance of the industry this far will be a shot in the arm for the ministry of new and renewable energy or MNRE, which has a target of achieving 100 GW of solar power by 2022.
According to India’s National Solar Mission roadmap, the country was supposed to add 1.8 GW in the year ending this month, taking the total to about 5.5 GW. Next year, India has a target of adding 7.2 GW and in 2017-18, it plans to add 10 GW.
Out of the total 100 GW to be achieved by 2022, 40% is supposed to be added in the form of rooftop solar and 57 GW in the form of large power projects or farms.
The 57 GW planned capacity addition will also include concentrating solar thermal plants in addition to photovoltaic, or dry, plants.
So far, nearly all the installations have been built using PV or photovoltaic technology, which is extremely low-maintenance as there are very few moving parts involved.
Part of the reason why the first-year target is set to be easily demolished is extremely enthusiastic participation from private companies.
Against India’s total target of 1.8 GW for this financial year, Adani Group signed an agreement with Rajasthan government in June to set up a 10 GW plant.
Rajasthan, which can easily meet the power needs of the entire country if it is covers even a part of its desert with solar panels, has announced that it wants to be home to at least one-fourth (25 GW) of India’s planned 100 GW capacity by 2022. At present, India’s total power generation capacity — including coal and hydro — is about 240 GW,
As of December, Rajasthan led the country with a total solar power generation capacity of 1.26 GW, followed by Gujarat with 1 GW and Madhya Pradesh with 0.7 GW. Maharashtra had 378 MW and Andhra Pradesh 253 MW.
By next year, Andhra Pradesh is likely to emerge second as it has 3,500 MW of power capacity already sanctioned for subsidy from the government of India.
The government of India provides subsidy to large parks at the rate of Rs 20 lakh per MW. The cost of creating a solar park in India is currently around Rs 5 cr ($735 mln) per MW, or about 73.5 cents per watt — one of the lowest in the world.
Due to the high insolation found in India, the country can produce about 200 kW per acre of land.
In addition, the high insolation has also resulted in high efficiency in terms of power generated by PV panels.
Unlike coal plants, which can output as much as 95% of their design capacity as long as fuel is provided, solar panels cannot work at anything close to that level as the sun is not available throughout the day.
As a result, typically, they output only about 12-13% of the rated capacity in case of fixed installations and 17-19% or so in case of moving installations where the panel tracks the movement of the sun through the sky.
However, some of the solar parks that have been installed under the National Solar Mission have been reported to output 21.75% of their design capacity, and the lowest efficiency found was 16.28%.
Not surprisingly, the price guaranteed by private players to the government for solar power dipped to just Rs 4.63 (68 cents) per kWh in November for a plant in Andhra Pradesh being put up by SunEdison.
Even under the ‘India-manufactured’ segment, prices dipped to Rs 5.12 per kWh in December. Under the domestic manufacturing segment, the developer can only use locally manufactured panels, though the silicon can be imported from other countries like China.
At present, coal-based power plants supply power to state distribution companies at around Rs 2 per unit, excluding environmental and health costs. It is expected that solar PV power will achieve parity with ‘dirty coal’ in another three years in terms of production costs.
In 2011, private players were bidding to supply solar power at Rs 8.3 — almost double the current rates. In December 2010, the lowest bid was at Rs 11.6 per kWh. Even these relatively high rates were considered risky at the time.