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Reducing Solar Cost – A New Norm for Modern World

The cost of generation of solar power is set to fall to as low as Rs 1.9 per unit by 2030 in India with decline in prices of solar panels and adoption of new tracking technologies boosting efficiency levels of utility scale projects. 

Solar energy is considered to be one of the most efficient forms of energy, which is clean, sustainable, in addition to being highly cost-effective, making it less expensive when compared to other forms of fossil fuels-based energy. This affordability of solar energy is a direct result of reduction in solar panel prices. In last decade, the global solar capacity has risen from 40 GW to 580 GW, whereas the solar panel prices fell by more than 90% and balance of system (BoS) costs have also fallen though at less steep rates. This momentous fall has been greatly attributed to fall in prices of polysicon silicon, improved cell & module manufacturing technologies like mono PERC & bifacial, half cut cell, increased wafer size, improvements in process of metallization to name a few.     

The solar panels are made of photovoltaic (PV) cells which are also called solar cells, a form of an electric device designed to convert sunlight into electricity in an efficient and environmental-friendly way. As the world is now beginning to understand the need to reduce global carbon dioxide emissions to curtail and reverse the dire effect of global warming, the process of transitioning from the use of conventional non-renewable forms of energy to renewable forms is picking up pace. From the past few years, the reduction in the solar panel price has made it even more palatable to the consumers to adapt to this option.

It is a well-established and scientifically accepted fact that renewable energy, specifically solar energy, is the most affordable source of electricity generation with competitive rates, that are plummeting further, to the liking of interested investors and buyers in this arena. After several studies based on global figures, a common consensus has been reached that the operation and maintenance costs of coal plants around the world can be undercut by the sinking costs of the novel big-scale solar plants, which on average can cost 80% less to build and operate when compared to their prices in 2010.

The setting up of new solar power plants in suitable regions with optimum utilisation of feely available natural resource can be a viable option to generate electricity at a lower cost when compared to the coal power plants which are operating in the present times. The photovoltaic panels or PV panels are a familiar piece of technology that many of us have seen either on the roofs or in use with a number of solar-powered equipment. One of the reasons for solar energy to be efficient and affordable is a direct result of low solar panel price with connivance to the evolution of this nature-derived form of energy which is being improved and perfected by man. 

With the passage of time, men, industries as well as the governments around the world have truly begun to understand the power and potential of harnessing the sun for its energy and take optimal steps to reduce the carbon footprints to make development a sustainable process. The better and wide use of solar power plants, in addition to incorporating larger solar wafers, the optimum use of PV panels’ cells (front and rear sides) through bifacial photovoltaic cells that lead to the increase in per square meter production of electricity with greater absorption of light, and the accelerated improvement in the module technology, all chalk up to the dip in the solar panel price, which in turn translate to inexpensive solar energy.

If humans were to transition to solar energy and make good use of it, then several studies indicate that the global CO2 emission will reduce by 5% (as per 2019 figures). Besides diminishing solar panel prices, the availability of solar panels and the allied technology, and the fact that setting up solar plants or panels can be easily done, adds impetus to this energy transition. 

Indian Perspective

Similarly, the cost of generation of solar power is set to fall to as low as Rs 1.9 per unit by 2030 in India with new technologies boosting efficiency levels, as suggested by the joint study undertaken by TERI and US-based, Climate Policy Initiative (CPI). These levels can achieved if the widespread deployment of tracking technology raises the capacity utilization factor of new plants above current levels. These energy price levels would be the game changer indeed for a power starving country like India. Currently, the solar power generated during the peak hours is being sold at much cheaper rates due to high cost of storage. This report suggests steep decline in cost of storage technologies, saying that the levelized cost of solar plus three hours of storage is expected to fall from Rs 13.6 per kWh to Rs 6.34 per kWh. Similarly, the levelized cost of stand-alone storage could fell to between Rs 29.0 kWh to Rs 11.9 per kWh levels depending upon size of project by 2030. This decline in storage cost could help facilitate high penetrations of cheap solar in the grid in India in next decade or so. 

It is expected that the Covid-19 pandemic would certainly slowdown the rate of solar penetration but there is no sign of being able to slow the cost reduction trajectory of renewables. In the future that is not too far ahead of us, the falling cost of solar energy and the solar panel price will become an enviable option that will be effective in boosting the global economy in countless ways and will yield much greater, lucrative returns.   

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