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 demand for solar increased: There has been an unprecedented demand for solar panel installation in India. The Central Electricity Authority reported a 28% year on year growth in energy generated from solar power in India when compared to 2018 and 2019. People have started realizing the multiple benefits of using solar and are showing interest in exploring Solar as their primary energy source.
- Initiatives by the Government: The Government is committed to increasing the use of clean energy sources. The GoI has introduced various policies and subsidy schemes that are conducive to their efforts. Ever since the Electricity Act 2003, the government’s efforts have been to streamline the promotion of solar panel installations in India.
- Through the National Electricity Policy 2005, Tariff Policy 2006 and its amendment in 2011, the government worked to increase the share of energy generated from renewable energy. With the introduction of a dedicated mission – The National Solar Mission – under the National Action Plan on Climate Change 2008, Government of India had specific goals for increasing use of solar thermal technologies in urban areas, industry, and commercial establishments. By then, Solar had established a strong presence in the country, and it was time to take actions on reducing the solar prices in India.
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.
- 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.
- 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.