Posted by: Dr Pano Kroko Churchill | February 2, 2012

Solar Wallah

Incredible news…
Solar has achieved grid parity in India today.
Because Solar power has always had a reputation for being expensive, it was not the best or the first option for the developing world’s electrification.

But things are a changing.

In India today, electricity from solar is cheaper than that from diesel generators and it approaches the equilibrium parity with the cost of the energy generated from coal plants… The news will surely boost India’s “Solar Mission” to install 20,000 megawatts of solar power by 2022 and could have implications for other developing nations too.

Recent figures from market analysts Bloomberg New Energy Finance (BNEF) show that the price of solar panels fell by almost 50 per cent in 2011. They are now just one-quarter of what they were in 2008. That makes them a cost-effective option for many people in developing countries.

A quarter of people in India do not have access to electricity, according to the International Energy Agency’s 2011 World Energy Outlook report. Those who are connected to the national grid experience frequent blackouts. To cope, many homes and factories install diesel generators. But this comes at a certain unbearable cost. Because not only does burning diesel produce carbon dioxide, contributing to climate change, but the fumes produced have been linked to health problems from respiratory and heart disease to cancer, for all those nearby breathing…

Good News is that now the generators could be on their way out… In India, electricity from solar supplied to the grid has fallen to just 8.78 rupees per kilowatt-hour compared with 17 rupees for diesel. The drop has little to do with improvements in the notoriously poor efficiency of solar panels: industrial panels still only convert 15 to 18 per cent of the energy they receive into electricity. But they are now much cheaper to produce, so inefficiency is no longer a major sticking point.

It is all largely down to economies of scale. The more panels we produce the cheaper they become. And something of Moore’s law taking effect too. Back in 2011, enough solar panels were produced worldwide to generate 27 gigawatts, compared with 7.7 GW in 2009. So now solar power is cheaper than diesel anywhere around the world where the sun shines as brightly as it does in Spain. That means vast areas of Latin America, Africa and Asia could start adopting solar power and do so at grid parity and certainly cheaper than diesel power.

The one thing stopping households buying a solar panel is the initial cost. Because buying a solar panel is more expensive than buying a diesel generator, but as solar becomes cheaper in the last seven years and panels lasting 25 years or more the economics are clearly in favour of solar…

Even in India, where solar electricity remains nominally twice as expensive as electricity from coal, that changes due to the fact that it s actually hit grid parity with coal save for the government subsidies to the coal factories… And while the price drop in 2011 was exceptional, solar will keep getting cheaper. Surely, by 2015, solar electricity will be as cheap as grid electricity in half of all the countries of this earth…

Yours,
Pano

PS:
And when that happens, do expect to see solar panels wherever you go.


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