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India Has The Cheapest Solar System Prices In The World, Even 20% Below China

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Solar Global Price Dynamics

India has not only become the poster boy of the solar energy and climate change fight by showing massive growth in solar capacity over the last few years and is all set to become the 3rd largest market for solar panels in 2017. The country has not only become a big solar proponent but has also managed to become the cheapest place to install solar systems in the world with GTM showing a figure of just 65 cents/watt. This is almost 20% cheaper than China which is the 2nd ranked country and shows the tremendous steps it has taken in market design to foster such cheap costs.

Also, read the impact of GST on Indian Solar Industry 

File photo of workers cleaning photovoltaic panels inside a solar power plant in Gujarat

One of the biggest advantages of India is the low prices of labor which is reflected in very low soft costs. While the hardware costs remain similar to China which makes most of the solar equipment, the soft costs in India are dramatically lower. This has resulted in Indian solar prices coming at 4 cents/kWh in recent tenders. Given that India has very high solar irradiance, it means that India can continue to decrease costs as its high interest rates come down.

Japan continues to remain an outlier with its solar system prices being almost 200% higher than that of India mainly because the solar developers continue to buy Japanese made solar equipment which is considerably higher priced than the Chinese and other Asian equipment. USA falls in the middle of the range with around $1.1/watt system pricing. Though this has come down a lot, there is a considerable scope of improvement, if the government there reduces the soft costs through more streamlined regulations and approvals.

What is even more heartening is that that GTM predicts that average solar system pricing will fall by another 22% in the next 5 years which will make solar energy even more competitive and cheaper as compared to fossil fuel costs. Solar energy without a doubt is the biggest weapon that mankind has in its fight against climate change and global warming
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Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to greensneha@yahoo.in

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