Consulting firm KPMG predicts that prices of solar energy will come down to Rs 3.59 a kWhr in 2025.
By 2020, solar prices will be Rs 4.20 a kWhr, at which stage solar will be cheaper than coal-based electricity by 10 per cent, KPMG says in its study titled ‘The Rising Sun’, released today.
The study says India will have installed solar power capacity of 54,000 MW by 2020 and 166,000 MW by 2025. In those years respectively, solar will account for 5.7 per cent and 12.5 per cent of the country’s installed power capacity, it says. India will be adding 20,000 MW a year from 2022 onwards. “Post 2022, coal prices could begin chasing solar prices,” the study says.
KPMG predicts solar module prices to drop to 25-30 US dollar cents by 2025, half of current prices. (This is in line with the global renewable energy consultant, GTM Research’s estimate of 36 cents by 2017.) Inverter prices will slide to 5-7 cents (from 9, now) and ‘balance of system’ to 25-30 cents.
Yet, the “biggest disruption” will come from solar rooftop, powered by advancements in storage technologies. KPMG estimates solar rooftop installations at 10,000 MW by 2020 and 49,000 MW by 2025.
The Government of India has set the country a target of 100,000 MW of solar to be achieved by 2022 (plus, wind power capacity of 60,000 MW, small hydro 10,000 MW and biomass 5,000 MW).
KPMG’s projections are more optimistic than those made by the Citi group (in a recent report titled ‘Energy Darwinism’). Citi estimates India’s solar capacity at 26,523 MW by 2020.