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REGIONAL ANALYSIS I INDIA


With these assumptions, we expect grid parity to occur in the years as mentioned in the table 1:


Energy access


A similar conclusion is reached for distributed solar PV generation at consumer premises. The band variation signifies the margins, i.e. the difference between cost and price (includes margins across the value chain). We expect the solar tariff to lie anywhere within this band depending on the bargaining power of the developers. Comparison between landed cost of power (LCP[6]) to residential or agriculture consumer categories in a particular year against the levelized solar tariffs in that year. While we expect grid parity for these consumer categories, domestic and agriculture, in 2019-20, based on state- specific and end-use specific cost economics, the adoption for solar is likely to happen earlier.


We expect high-end residential consumers to be proactive in adopting solar rooftop given their higher power tariffs. A large number of these consumers are likely to start adopting solar power from 2017-18. However, government involvement will be required in encouraging non- high-end residential and agriculture consumers to use solar power from 2017-18. Roof- top PV will spur other intangible benefits. Being highly “visible” in the public eye, it will contribute to generating a great deal of awareness among the population about clean energy and benefits of distributed generation. This, we expect, will contribute to a culture of energy conservation and environmental responsibility which is very important from a national perspective.


Large scale leverage


The large scale utility power can be procured either from Solar PV or from CSP depending on the cost economics. In the exhibits below, we have captured various scenarios in which grid parity could occur for both CSP and PV technologies. However, solar CSP, due to the storage factor, can be instrumental in meeting the evening peak requirements and therefore be potentially more attractive from a utility scale perspective.


We expect the grid parity to happen in 2019-20 when the levelized tariffs from solar power are comparable with the


Annual Solar Market Off-take (MW) Grid-connected Solar Potential Residential Rooftop


Utility Scale Solar Power (CSP and PV) Off-grid Solar Application Potential Solar-powered Agriculture Pumpsets Solar-powered Telecom Towers Total Annual Solar Market


Table 2 Issue VIII 2011 I www.solar-pv-management.com 47


2017-18 -


1,024 1,043 -


268 318


2,653


We believe that the solar energy sector is going to have a discontinous impact on our


energy sector and certainly a positive and welcome one.The impact will come sooner than most people expect


levelized tariffs of grid power in this year. It is important to state here that these conclusions are for broad-based grid parity across the country.


Certain states will reach this point earlier. For example, the states of Rajasthan, Gujarat and Tamil Nadu are expected to reach this point earlier not only because they have higher solar insolation, thereby reducing the cost of solar power, but also because the cost of conventional power in these states is higher as they are located far away from coal resources and have little local reserves.


This conclusion has significant implications for market offtake of solar power. We expect significant offtake to start occuring in the years immediately preceding grid parity. In table 2, we have summarized the offtake trajectory from 2017-18 (the year from which we expect the cost economics to work in favour of solar power in India) from various segments including grid connected and off-grid applications:


This is significantly in excess of the targets under the National Solar Mission – cumulative capacity of 22,000 MW by 2022. The cumulative installations in the period 2017-2022 itself could be approximately 57,500 MW. In the period up to 2017, the market will continue to be policy driven. This phase of the market is extremely important if we are to achieve the rapid scale up post 2017.


2018-19 -


1,356 2,229 -


563 380


4,528


2019-20 -


3,600 3,570 -


3,969 414


11,553


2020-21 -


5,341 5,084 -


4,639 562


15,626


2021-22 -


7,677 8,146 -


6,730 612


23,165


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