The study estimate that by 2030 solar electricity could be as cheap as Rs 2.30 per kWh and even cheaper solar costs are possible, in the order of Rs 1.90 per kWh.
The cost of generation of solar power is set to fall to as low as Rs 1.9 per unit over the next decade through 2030 in India with new technologies boosting efficiency levels, a joint study by TERI and US-based think tank Climate Policy Initiative (CPI) has revealed.
The newly launched report projected that by 2030, the cost of wind and solar will be between Rs 2.3-2.6 per kilowatt hour (kWh) and Rs 1.9-2.3 per kWh, respectively, while the cost of storage will have fallen by about 70 per cent.
According to the analysis, the required investments in electricity generation capacities are going to be substantial, at about Rs 1.65-1.75 lakh crore per year. This is slightly above the investment rate achieved over the past 10 years, around Rs 1.40-1.50 lakh crore per year. This will represent a substantial financing challenge given the current stresses on the Indian banking system.
The report titled “Accelerating India’s transition to Renewables: Results from the ETC India Project” also states that in the high renewables scenario by 2030 the share of variable renewables including wind and solar will reach 30 per cent of total generation by 2030, and 390 GW of capacity. The capacity could reach 420 Gw if small hydro and biomass based projects are also considered.
The study estimate that by 2030 solar electricity could be as cheap as Rs 2.30 per kWh and even cheaper solar costs are possible, in the order of Rs 1.90 per kWh, if the widespread deployment of tracking technology raises the capacity utilization factor of new plants above current levels.
The report also projects dramatic cost reductions in storage technologies, saying that the levelized cost of solar plus three hours of storage could fall from Rs 13.6 per kWh to Rs 6.34 per kWh. The levelized cost of stand-alone storage could fall from around Rs 29.0 kWh to Rs 11.9 per kWh by 2030. This decline in storage cost could help facilitate high penetrations of cheap solar in the grid.
The research also states that even considering the additional costs required to balance the variability of renewables, a grid with 30 per cent RE generation is cost-effective as compared to a moderate RE system and would not raise costs for Indian consumers.