Air Pollution Reduces Energy Payback Period

Solar energy has been beating the pants down of all other energy sources. Coal is the worst hit as it was the undisputed king of the power industry with a vast majority of the electricity generating plants in the world using coal as their main fuel source. Despite its dirty nature and huge contribution towards both soil, air and water pollution, there was the TINA factor for coal. However, with solar energy prices dipping below coal in many places in the world, countries can now afford to totally abandon coal as a fuel source. Some countries such as UK and Canada have already announced long term targets to ditch coal. Through there are some rebels such as the U.S., I think it is only a matter of time before coal becomes relegated to the history pages, given that solar energy prices keep falling every year.

Also, read Why Indian Solar Prices Will Fall Further – By How Much And When

Coal has now found a new ally to fight solar energy in India. It is its cousin air pollution. In major cities such as Delhi, air pollution is dramatically reducing the energy generated by solar power plants. There is a lot of smog and haze that affects major cities and that can substantially reduce the amount of radiation being received by solar cells. Some major Indian solar installers have complained that the theoretical value of energy yield from rooftop solar plants in these cities is much higher than what can be seen on the ground. This has a pernicious affect on the return figures for these solar energy plants resulting in a lower payback and IRR. This also makes the solar plants less economical as compared to other fuel source based plants.

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Given that coal power plants play a very crucial role in creating the massive haze that affects countries like India and China, it can be said that coal is fighting solar using pollution. Despite this temporary setback, solar energy cost curve is going down so rapidly, that these small pinpricks will not have much effect on the dramatic change in the energy industry where solar energy is completely taking away the pie from gas, coal, oil and others.

“Ninety per cent of our projects are in the metros, the top eight cities of India… They are usually either in centre of city or in industrial areas. And we have already seen, particularly in NCR, that whenever we set up a project we do a generation forecast based on 25 years of meteorological data,” said Andrew Hines, co-founder of CleanMax Solar, an on-site rooftop solar power developer. “We have already seen in NCR that the plant underperforms—radiation is consistently lower than what historical average suggests.”

Source: Livemint