Moser Baer hopeful of cutting solar energy cost to Rs 4-6 a unit

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Solar power could be the solution for energy crunch

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Moumita Bakshi Chatterjee

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New Delhi, June 3

At a time when crude prices are peaking, a reduction in solar power costs could brighten the energy scenario. The solar photovoltaic (PV) business, which incurs a generation cost of Rs 12-14 per unit, is looking at reducing it to Rs 4-6 a unit in the next three to five years.

The reduction would mainly be on the back of anticipated easing of global demand-supply imbalance of silicon, advances in thin-film PV, higher cell efficiency and other innovations.

"Depending on various factors, one MW of solar energy involves an investment of $5.5-7 million. This is going to come down to the $3.5-5 million range in short to medium term. In the next 10 years it may go as low as $2.5 million per MW. In terms of generation cost, today I can give power at about Rs 14 per unit, and our roadmap clearly shows us a visibility to hit Rs 4-6 per unit," Mr Ravi Khanna, CEO of Moser Baer Photo Voltaic Ltd, said.

How it fares

In contrast, the average cost of generation at coal-fired thermal stations is around Rs 3 a unit. Gas-based generation costs higher at around Rs 4-5 a unit, while liquid fuel-based generation costs over Rs 7 a unit. However, industrial power purchasers are willing to shell out higher tariffs upwards of Rs 7 a unit to meet the peaking shortages at these high tariffs.

For instance, captive power owners in Maharashtra's industrial townships such as Pune are getting requests for supply of excess power to industrial and domestic consumers during peak hours at close to Rs 10 a unit.

PV price parity outlook

So far, capacity constraints in silicon – the raw material for most solar panels, which in turn are used to generate solar power – have kept prices artificially high. However, now with capacity augmentation by silicon suppliers that is set to change. "Silicon accounts for close to 70 per cent of the panel cost, and it should ideally drop to 40 per cent," said Mr Khanna adding that photovoltaic modules based on new Thin Film technology – using Silane gas as raw material – promise to significantly lower solar energy costs.

Moreover, Mr Khanna pointed out that optimisation in processes and equipments, customised for the PV business, could yield 25-50 per cent cost benefits.

"For instance, PV players have been procuring silicon wafers of very high purity level which is not ideally required, so we have invested in a firm in Slovenia where we are producing solar grade silicon and optimising quality," he said.

The industry is also gunning for higher efficiencies in solar panels. "One MW, depending on solar conditions, results in 0.9-1.2 million units per year. If the efficiency level rises, the yield per MW could he much higher," he said.

Globally, solar energy plants with huge capacities have started dotting the PV horizon. These include a 300 MW solar facility in New Mexico, US (New Solar Ventures and Solar Torx); 280 MW Solana Solar plant in Arizona (Abengoa Solar and Arizona Public Services Company); 154MW project near Mildura, Australia (TRUenergy and Solar systems). In India, Moser Baer Photo Voltaic has signed MoU with Rajasthan for setting up a large solar power project with an estimated generation capacity of 1-5 MW. The project would be the largest grid connected solar farm in India. Although the company refused to comment on the tariffs for the project, the subsidy level is likely to be about Rs 10-12 per unit.

Related Stories:
Moser Baer setting up grid connected solar farm
Moser Baer looking for expansion in photovoltaics
Centre chalks out plan to develop 60 'solar cities'
Companies making a beeline for solar energy plants
Solar energy project to attract private capital
Push for MW-capacity solar power generation

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