Worldwide, renewable energy has established itself as the technology of choice for new power generation capacity and India’s recent status of lowest-cost producer of solar power further reflects an ongoing shift towards renewable power as the driver of global energy transformation. Recently an analysis by IRENA found that the costs for setting up solar PV projects have dropped by about 80 per cent in India between 2010 and 2018.
India’s solar story through its compelling business case is maximizing the falling renewable technology costs as the key to future energy decarbonisation. The country has realised that it is cheaper to build and operate solar farms than to run existing coal-fired power plants. Renewable energy also has significant environment benefits making it the single biggest driver to help us meet our carbon emission reduction targets in our fight against climate change. With India being a growing economy, power consumption is only going to rise, so adoption of alternate forms of energy is the ideal way forward to manage balance between economic growth and sustainable environment.
Having recognised this as early as 2010, the Government of the country has taken steps to ensure consistent growth in the segment. This in turn has helped the solar industry reach economies of scale in a short span of time, making India the cheapest producer of solar power. In 2010, the total installed solar capacity was 10 MW and in 2016, the installed capacity stood at 6000 MW – a steep climb of 600 times in just 6 years. As of March 2019, the total installed solar capacity stands at 30 GW, accounting for an increase of 5 times in 3 years. Today, solar has reached 30% of the 2022 target of 100 GW contributing 38% to the renewable energy mix. The numbers are a testament to the focused approach of the Government and the positive response from solar developers leading to exponential growth. Solar power consumers in India today enjoy better energy security by locking in the cost of solar electricity for a period of 25 years, thereby can hedge against variations in grid electricity price, which are tied to fossil fuel costs.