Key Factors Driving Down Solar Prices in India | Freyr Energy

Key Factors Driving Down Solar Prices in India

Solar prices in India have reduced drastically in the last couple of years, which has alternatively led to a dramatic increase in the supply and demand for solar panel installations in the country.

Solar energy is relevant for a tropical country like India, which receives ample sunshine throughout the year. Today, India is the third largest solar market in the world as in 2019 witnessed around 7.3 GW of solar panel installations in India.  While we pride ourselves with these achievements, it is worth looking at some key aspects, which have led to a reduction in solar prices in India over the last few years.

The solar energy initiatives in India such as the Green Energy Corridor project have been put in place to support the grid installation of large-scale renewable energy capacity addition. Several schemes such as Pradhan Mantri Kisan Urja Suraksha evam Utthan Mahabiyan Yogana ( PM – KUSUM), CPSU (Government producers) Scheme Phase-II and Solar Rooftop Phase-II program are aimed at the improvement of solar generation as well as adoption of solar energy in India.

  1. The Semiconductor Policy 2007 was announced to draw investments in semiconductor fabrication by providing special incentives for manufacturing of all semiconductors and solar photovoltaic cells. With the Karnataka Semiconductor Policy 2010, Government of Karnataka was the first state to announce its semiconductor policy to encourage solar energy sector in India and they focused on developing the entire value chain.
  2. A decrease in benchmark energy subsidy prices – Benchmark cost is a reference cost suggested by the Ministry of New and Renewable Energy, and is often used to calculate subsidy disbursement for rooftop solar systems. The benchmark cost for grid-connected solar rooftop installations are being progressively reduced in the last 3-4 years.

During 2017 to 2020, the ‘up to 10 kW capacity’ category saw a 77% decline and the ’10-100 kW capacity’ category saw a 73.8% decline in benchmark costs.

With a 30% return on investment, Solar is the way forward for energy generation in the country. We at Freyr Energy, feel that this is an opportune time to invest in Solar. We have seen huge growth in solar panel installation in Hyderabad, Delhi, Pune, Nagpur, Vijayawada, Chandigarh, Bhopal etc.

Our efforts have always been focused towards providing our customers with the best quality services at affordable prices. Choose Solar today, for a clean and green tomorrow.

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