With the lowering price of solar energy which has gone as lower as expected. The concerns are triggering that Solar energy may get cheaper than coal in India by 2020. In India, which is Asia’s third largest economy, the solar energy may get 10% cheaper than coal power.
This month, the Ministry of New and Renewable Energy granted a tender for a 500-megawatt solar park in the southern state of Andhra Pradesh to US-based Sun Edison at Rs4.63 a unit which is the lowest rate so far in the country.
According to the research firm KPMG that says “Today, in India, solar prices are within 15% of the coal power prices on a levelised basis. While this may not fully capture costs such as grid integration costs for solar, our analysis suggest that even after considering the same, solar prices would be competitive with coal.”
KPMG said in the report “the growing scale and competitiveness of solar power could impact local coal prices; the firm predicts that this change will become visible in 2017, and will accelerate after the year 2020. Post 2022, coal prices could begin chasing solar prices, and not vice versa as we see today.”
“Eventually, coal may have to respond by reducing its cost structure and an equilibrium is likely to develop, but this transition could be challenging for the coal sector if early preparation is not done,” as said by KPMG in the recent report.
