Thursday, 15 March 2012

Is Solar Energy (PV) really affordable?

The most frequented question we come across is whether Solar Energy is affordable. Affordability comes into picture with 2 aspects - Need and Alternative. The need aspect is about the need for stable electrical power. While the alternative aspect is the grid power - in case there is a grid or alternatively DG Sets.

Looking at the Need aspect first- electrical power is a basic requirement for anyone and everyone. Especially for a growing Country like India more power would be needed with increased affordability. Nearly 40% of the household are without power today and the peak deficit is in the range of 12-15%. Let alone power availability many of the rural areas are not even electrified. So then if all the areas are electrified the peak deficit could be a much higher number. So the need for electrical power is certainly there - in semi urban areas which suffer from blackouts / brownouts and rural areas where there is no electrification at all. In fact even some of the Tier-1 cities (except Mumbai) suffer power problems especially during Summers. There is certainly a growing need for power and stable one at that.

[Suggested Read - What you should know before going Solar !]

With regards to Alternative - what exactly is alternative to Solar PV? Wind? Biomass? Hydro? All of them have some or the other issues and that is precisely the reason Solar PV scores above all of the renewable technologies. If one is resistant to changing over from grid power to Solar PV then we suggest that Solar PV is not a replacement for grid but complementing the grid power. With soaring Diesel prices + pollution + maintenance + operational costs people have now realized that DG sets are not a good power option. In fact cost of power generation from Solar PV is much lower than that from DG set. With earlier prediction grid parity for Solar PV was to be achieved by 2015 which is now revised to 2012/13. (To know about Grid parity please check our Solar PV FAQs)

Antagonist of Solar PV also suggest that Solar Energy cannot work without subsidies or Government incentives. Nothing else can be farther from truth. With recent bidding for Solar PV Projects for prices as low as INR 7.0 to INR 7.5 per unit and Grid power at nearly INR 5.0 to INR 6.0 per unit and in some cases even INR 7.0 to INR 8.0 per unit - Solar PV can easily survive without subsidies or incentives. How?

[Suggested Read - Does Energy Audit really Save Energy?]

Consider the following :
  • Solar PV is one-time investment and the prices have come down significantly.
  • There are nearly zero or no-maintenance cost associated with Solar PV.
  • Solar PV critical components have a life of 20-30 years.
  • Grid power prices are on the rise with another recently announced another rise of 33%.
  • With increased awareness about benefits of Solar PV the demand for PV is expected to rise further resulting in further reduction in PV Project costs.
The bottomline - Solar Photo Voltaic is truly affordable. It may have already been affordable in some areas where grid power price is quite high. Or for some of the Industries or Commercial Complexes where DG set is being used. As the Government subsidy is quite attractive any incentive or subsidy should be considered a boon for the project maximizing returns and minimizing payback period.

We also suggest a quick read of our Post on Solar Energy which is about General Information on Solar Energy especially Solar Photo Voltaic its working and suitability for Indian conditions. For basic information you may visit our post on Solar Energy Facts.


  1. This comment has been removed by a blog administrator.

  2. Excellent Information! The holding point for Solar development in India can largely be attributed to the cost factor. This post clears all the misconceptions related to the same.

    1. Respected Sir,

      Thank you for your kind and encouraging words.

      We truly believe that information dissemination is crucial for success of Solar Energy in India. We therefore reach out to several thousand people and spread awareness regarding this subject.

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  3. Deep insight into affordability of Solar Power. Easy understanding even for lay persons. But do you think that Solar Power will dominate India's power scenario?

    1. Respected Sir,

      Thank you for your comment and your view point.

      Solar Photo Voltaic certainly has various significant benefits - which no other Technology (including other Renewable Technologies such as Wind, Biomass etc.) can offer as pointed out in our post about Benefits of PV Solar over other Technologies. Moreover Solar Photo Voltaic prices have fallen down significantly and with the Government support the project viability certainly exists. With improved affordability in the present scenario - Solar PV will definitely prove to have a significant impact at various levels - Rooftop Projects (kW to MW level), Community Projects (kW to MW level), Utility Scale Projects (MW+ levels).

      No single technology can suffice for a Country. Therefore we do not intend to say that Solar Energy can be the solution for entire power requirement of our Country. But we are certain that Solar PV will definitely prove to be the solution of choice and will have a much bigger role to play in the coming times mainly because of various distinct benefits it offers. At a National level it can reduce India's dependence on fossil fuel to an appreciable extent to begin with.

      Enerco Energy Solutions LLP

  4. sir can you please tell me is it worth to have a soler power project...?

    1. Sir - please drop us a mail on

      Thanks !