Friday, 14 September 2012

Solar Energy vs D.G. Set !

We have been promoting Solar Energy Solution (Solar PV) as a part of a Power Portfolio for Industrial consumers. The benefits and advantages of Solar PV are quite well-known including :

As per various sources the cost of generating electricity from D.G. Set is about INR 12.0 to INR 14.0 per kWh based on location and other details. O & M and other costs are additional - not to mention the air and noise pollution.

With the recent hike in diesel prices (of about 15%) it is very much likely to impact D.G. Set users especially Industrial Plants - who would be hit the hardest. This would mean cost of generation from D.G. Set would be around INR 15 per kWh - exorbitantly high and expected to rise further.

Enerco Energy Solutions had posted about comparison between Solar Power and D.G. Set in August 2012. The same was posted on our Facebook page and is now posted below as well.

Solar Energy vs D.G. Set cost per kWh
                          Expected Trend : Cost of Power Generation from Solar vs Diesel Genset

The diesel price hike is primarily to control fiscal deficit i.e. the difference between Government spending and Government earnings. The fiscal deficit had touche around 6% of GDP which is extremely high. The Government is under severe pressure to hike the fuel prices to reduce its fiscal deficit i.e. internal reasons. Externally there is tremendous pressure to reduce reliance on fossil fuels especially D.G. Sets. Even after the recent hike the subsidy on diesel is quite high and the fiscal deficit will be hardly impacted. With the risk of downgrading the Country rating the Government will try to appease overseas investors. Hence in all likelihood Diesel prices will touch around INR 60 per litre in next one year.

PV Solar is a much better alternative to grid power as it offers a consistent cost of generation and does not require any fuel to operate and has a useful life of about 25-30 years. Although D.G. set can be used as an emergency backup it should be only used in case of emergencies and not as a backup solution. With the focus on renewable energy technologies it is no surprise that Solar Energy would continue to enjoy good subsidies and incentives till such time that grid parity is achieved. It is thus not only economically viable to invest in Solar Energy Projects but also a much needed and the only solution offering such viability.

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