Solar To Compete With Fossil Fuel Prices in India

India’s new solar panel manufacturing firm will see solar prices compete with coal in India.
Published: Thu 15 Jan 2015

Solar power firm SunEdison and Indian conglomerate Adani Enterprises plan to invest up to US$4 billion in what would be one of India's largest solar panel manufacturers.

The factory, to be located in the western state of Gujarat, will vertically integrate all aspects of solar panel production at one site including polysilicon refining, wafers, cells and panels production. Local solar power generators say the existing local manufacturing facilities don’t meet their technical requirements.

Creating low cost solar in India

The two firms say that the new joint venture project would see the manufacturing of low-cost photovoltaic solar panels which will help reduce electricity rates in the country. Solar energy in India costs up to 50% more than power from sources like coal.

India boasts twice as much sunshine as many European countries that use solar power. However, the clean energy source contributes less than 1% to India's energy mix, while its dependence on unreliable coal supplies leaves the country with major power cuts.

India currently has a 2.7GW of solar power generation capacity, contributing marginally to the overall 255GW of generation capacity is made up mostly of coal.

It is hoped that solar power generation will eventually start reducing India’s reliance on fossil fuels. India’s imports of oil, gas and coal have escalated significantly in recent years, contributing to a trade deficit that has shaken international confidence in its economic future.

With an increase in cheaper power production, countries like Nepal will also benefit through power trading with India. [Engerati- India and Nepal to Trade Electricity.]

"This facility will create ultra-low cost solar panels that will enable us to produce electricity so cost effectively it can compete head to head, unsubsidised and without incentives, with fossil fuels," said Ahmad Chatila, President and Chief Executive Officer of U.S.-based SunEdison, already a major industry player in India.

SunEdison will also be installing 159kW of solar PV microgrids with battery storage for 4,875 off-grid people in six remote villages in the central Madhya Pradesh state. [Engerati – More Microgrids Coming to Remote Villages In India.]

Local opportunities in solar development

The deal, while still subject to further analysis and discussions, is a positive development for Prime Minister Narendra Modi, who seeks to encourage the growth of both alternative energy and manufacturing through his "Make in India" campaign.

The proposed plant, which is expected to take three years to build, would add up to 20,000 jobs to the local economy, giving Modi's government a chance to assert that India's economic recovery can also create the jobs it needs to satisfy a growing workforce.

Modi wants companies from China, Japan, Germany and the United States to lead investments of US$100 billion over seven years to boost India's solar energy capacity by 33 times to 100,000 MW.