Harnessing Solar energy, Options for India

It is difficult to estimate the potential for industrial applications, as there are several to be
considered here. However, taking into account India’s solar potential and going by the estimates
provided by the International Energy Agency (IEA) for Europe, the potential energy savings are
substantial. It is felt that evaluating potential energy savings from the use of solar thermal
technology merits a study of its own. The use of solar thermal technology can substantially reduce
fossil fuel consumption in the domestic and industrial sectors, which would result in a considerable
reduction in annual CO 2 emissions. The JNNSM target of 20 million m 2 of solar thermal collector area
for all applications is clearly not ambitious enough, given that the potential for solar water heaters
alone in the country is as high as 18.7 million m 2 .
3.1. Recommendations
The MNRE should fund a few large-scale demonstration plants and incentivise the industries that are
manufacturing and utilising solar thermal technologies. Furthermore, it should sponsor several case
studies of working plants and hold workshops to widely disseminate the findings.
4. Cumulative Capacity, Grid Parity and Cost
With significant technology improvements and cost reductions, the cost of solar PV is likely to be
competitive with peak electricity price by 2018–22 and with coal-based generation perhaps a few
years later. The chapter ‘Cumulative Capacity, Grid Parity and Costs’ estimates the cumulative PV
deployment in the country by using diffusion curves. Grid-connected solar PV could scale anywhere
from 5,000 MW to 12,000 MW by 2022. Using learning curves, projecting the cost of solar PV system
from today’s `180 per W p (the system cost is an assumption), in 2022 it ought to come down to `108
or lower.
Given the current status of CSP in India and globally, it is difficult to foresee how this technology will
unfold. CSP today is fraught with uncertainties and the capacity addition is likely to be fairly low.
However, for the sake of projecting total budgetary impact, the capacity addition for CSP is assumed
to range anywhere from 1,000 MW to 8,000 MW by 2022. The following summarises the results if
20,000 MW of solar capacity (12,000 MW of PV and 8,000 of CSP) is installed by 2022:
Projecting forward the generation-based incentives for PV and CSP, the total net present value of
all incentives (assuming annual power purchase agreements [PPA] signed for twenty-five years)
will amount to a maximum of `1,800 billion (at a 10% discount rate) .
The increase in grid tariff to pay for solar-based generation will be at most `0.26 per unit of
electricity, which is not too onerous.
The total generation in 2022 from the 20,000 MW installed capacity (assuming 20% plant load
factor) will be 35.7 billion kWh.
Solar energy can reach up to 2% of the total energy mix by 2022. a The original JNNSM document
that was released in December 2009 projects solar power purchase obligation for states to start
with 0.25% in Phase 1 and go up to 3% by 2022.
4.1. Recommendations
The MNRE should clarify several of its policy guidelines, particularly relating to the signing
of PPAs. Furthermore, the roles of the state and central governments in the implementation
a The net electricity supplied in 2009–10 was 681 billion kWh and in 2022 it will be 1616 billion kWh. A
detailed explanation can be found in the chapter ‘Cumulative Capacity, Grid Parity and Cost’.
Executive Summary CSTEP | Page 16