Madhya Pradesh is set to be home to the cheapest solar power not only in India but the entire world, finally offering a cost-effective alternative to the environmentally-harmful thermal power.
Companies that have bid for projects floated by the Madhya Pradesh Power Management Company are ready to sell solar energy to the state for as less as Rs 5 per unit for a period of over 20 years. According to energy experts, the offer is lower than the global average price of Rs 6.10 per unit and even beats the cost at which the Delhi government buys from thermal power companies.
The price of solar power has seen a global decline in the last few years with India too witnessing a dramatic fall – fastest in the world – since 2010 when the Jawaharlal Nehru Solar Mission was launched. A unit of solar energy cost Rs 17 then.
The plummeting prices can be attributed to an increase in Chinese export of low-cost photovoltaic cells that has in turn led to an 80% drop in prices of solar panels over the last five years. Also, the efficiency of the panels to convert solar energy into electricity has improved from 13% to 18%, resulting in cheaper power.
India is a major investment destination for major international and domestic energy firms with Prime Minister Narendra Modi announcing a five-fold increase in target for generating solar power to 100,000MW. All state governments revamped their solar energy policies to meet the new target and Madhya Pradesh was the first to announce the setting up of special solar energy parks with single-window clearance.
A senior official in the Madhya Pradesh renewable energy department termed it the beginning of a new trend which could witness the price of solar energy falling further at a time when thermal power continues to get costlier with an increase in prices of coal.
The Union Ministry of New and Renewable Energy (MNRE) too expects the price of solar energy to go down further when states like Rajasthan, Gujarat and Uttar Pradesh invite bids for their projects.
A senior ministry official said Madhya Pradesh has given a boost to their estimate that solar power will cost less than thermal power across India by early 2016.
“What has happened in India in solar sphere in five years took 15 years in Germany,” Christian Redl of Agora Energywende, a German energy think tank, had told this correspondent during a visit to Germany in May this year.
According to Arunbha Ghosh, chief executive officer of the Delhi-based Centre for Energy Environment and Water, solar technology is seeing a major transformation across the world. “Solar is for energy what internet is for communication. In coming years, you will see solar energy run-equipment in homes like computers,” he said.
Some experts, however, fear that falling prices of solar energy may lead to its doom if corrective policy initiatives are not taken.