Solar Power Becomes Cheaper Than Diesel Generators in India

While the passage of time makes solar cost competitive for many Americans right now, the question of cost competitiveness is not a simple one for solar. It depends on location, installation costs, and what kind of power solar is competing against. In Africa, solar has already become cheaper than kerosene in many locations. And now Renewable Energy News reports that solar is becoming cheaper than diesel generators in India as French-company Solardirect has bid to supply the energy grid with solar power at a rate cheaper than the average for diesel generators:

Some analysts were skeptical of the Rs10.95 (US$0.21) per unit bid during the Batch 1 bidding process about one year ago. Analysts argue that several successful bidders from Batch 1 had not met financial projections and feared the projects would fail to see the light of the day. To add to the skepticism, mixed reactions kept pouring in over the availability of land, locally manufactured modules and other technological issues.

Whether or not these concerns hold true, this new benchmark will push India to solve other major issues such as pollution and high diesel generator costs. Even if solar rates reach Rs10 per unit, the higher rate would still appear cheaper compared to the rising high cost of diesel and the incremental maintenance costs associated with diesel generators. The diesel generator industry will not be the only sector that experiences heat — this solar trend threatens all scheduled mega thermal power projects.

Tags: Economics | India | Solar Power

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