Manufacturer and developer, Tata Power Solar and analyst, Bridge to India have just released a report stating solar in India is already cost-competitive with imported coal, and will be level with domestic coal generation by 2019.
An inevitable “solar revolution” is just around the corner for India, predicts Bridge’s managing director, Tobias Engelmeier. “There isn’t really an alternative. Coal is limited, other resources are limited; solar is the one thing that is available in almost unlimited quantities,” he says.
“A lot of people have been pessimistic and sceptical over the last year, but the report shows the potential is actually higher than [current national targets],” adds Engelmeier.
Tata Power and Bridge to India worked on the report, ‘Beehives or elephants? How should India drive its solar transformation?’, for a little over six months. It looks at all types of on-grid solar generation, naming small rooftop solar “bees”, larger commercial and residential rooftop systems, “pigeons”, utility-scale projects “horses” and mega-scale solar “elephants”.
Talking to PV Tech, Engelmeier and Tata Power Solar CEO, Ajay Goel say the report highlights the difference between the cost of power at generation – the levelised cost of energy (LCOE) – and the cost at consumption – the ‘landing cost of power’ (LCOP).
Goel says the report scrutinises “everything for each scenario to find out the real cost of power when it gets to the customer”. “The idea was to come up with a thought provoking way to look at the different opportunities,” he says.
Engelmeier explains that while India has been successful in utility-scale solar, from 20-50MW in size, the announcements of mega-solar parks and the development of much smaller distributed rooftop solar, there is still has “too little understanding” of the “merits and demerits” of each scale for policy makers. The report aims to set the record straight.
“We are talking about very different types of markets,” says Engelmeier. “There is a role for all types [of solar] in India, but not one at the expense of the other.”
The report focuses on looking at solar as different to other renewables, due to the flexibility in deployment scales: from mega-gigawatt solar power plants, to a couple of kW systems on small houses.
The report is aimed at everyone from investors to developers, installers and homeowners, to policy makers.
Engelmeier says the development of mega-scale solar is a large infrastructure task which requires investment in transmission distribution infrastructure. “There are only a few key players in the market that would be able to work on something like that.”
Goel adds that transmission infrastructure can be 300-400km, and can include balancing power from fossil fuel plants or storage.
Engelmeier explains that as mega-scale solar parks are located in cheap, high-radiation land, far from load centres, sometimes the LCOP would actually be cheaper from distributed solar generation.
The report also aims to show the costs reductions for large-scale projects are more immediate, driving the market forward. Engelemeier says larger infrastructure projects are favoured by policy makers, “as they fall into existing categories of institutional decision making, but what hasn’t been pushed enough in India is the distributed generation opportunity – and that is very large.”
For smaller rooftop systems, there is more work in “creating a market, which relies on reliable policies, like net metering, or creating consumer finance options, it is very different”, says Goel.
Engelmeier suggests that the larger scale solar market is easier to execute because the government can provide support directly, but for the small-scale market – a more long-term, sustainable market – “the government needs to create the right ecosystem for it”.
Goel says “tactical consumer financing” is needed to open the market to the millions of customers required to kick start the distribution market ecosystem. “At the moment there are few installers in the country, few installations, the whole system is not yet functioning probably,” adds Engelmeier.
An ecosystem can be created “through having more professional sales structures, installation companies and financing mechanisms”, says Engelmeier. This development would allow for cost reductions in the rooftop sector.
Taking in limiting factors such as space and grid capacity, however, Engelmeier says India could do 100GW-plus of residential and commercial rooftop.
Engelmeier also adds the report shows how solar can be integrated with the existing grid structure, without threatening other generation markets. “Solar should be a very large chunk of India’s future energy needs, a large chunk that is feasible in the next 10 years and does not destabilise the existing power systems – to get everyone on board is a big thing.”
The government still “needs to help set the scene” for solar says Engelmeier, until “substantial parity” is met and the market takes off by itself.
Goel says there has been a lot of talk from the new government, and the report shows how national targets can be met using solar.
“We’ve been hearing a lot about ambitions from the new government, about more electricity for the poor and getting away from power deficits, we have been very encouraged by this, and we hope this report will provide a starting point; a blue print for solving energy problems in as many ways as possible,” says Goel.