How Bihar Rebuts Alliance Bernstein’s Negative Solar Research

Business Insider has come out with a negative report on solar energy citing its high expense and land costs citing research from Alliance Bernstein. While Alliance Bernstein is one of the better equity research houses, this solar energy research is full of holes and fallacies. The brokerage cites that solar power is very expensive if you take in the cost of real estate and energy storage. However 80% of Germany’s solar energy capacity is installed on rooftops where the real estate is free. Again Energy Storage is not needed if you supply electricity into the already existing power grid. Research has shown that the power grid can easily absorb 15-20% of its capacity from renewable energy sources like wind and solar which are intermittent in nature.

Catherine Wood says that solar energy costs 37.5c/Kwh when India’s poorest state bought solar energy through a PPA for only 13c/Kwh . Note this price is fixed unlike fossil fuel prices which constantly go up. There are still people who still think solar power as expensive and niche. However Bihar which is India’s one of India’s poorest state is seeing huge sales of unsubsidized solar panels as costs have reached grid parity. The costs of Nuclear Energy and Coal Energy does not include the massive risks of nuclear accidents, nuclear waste, huge cost overruns and over 20,000 coal miner deaths each year.

World’s Biggest Off Grid Solar Market

The best way to see if a durable appliance is becoming a part of common household item in India is to check whether it is being given as part of the dowry when a father marries off his daughter. By that yardstick cheap crystalline solar panels in India have become a common household item as families are gifting their daughters’ small solar panels which will help power their new houses with lights and fans during the pervasive power black outs. Note India suffers from a huge power deficit as corruption and wastage ensures that large parts of rural India remains entirely in the dark. There are also large swathes where the Indian electricity grid does not reach. These parts of India are powered by diesel and kerosene powered lamps and fans. These are now being replaced by super cheap solar panels which sell for around $1-2/watt depending on whether it’s a genuine brand from companies like Luminous, Tata Solar Power Systems or a sub standard knockoff .

Note the world’s largest off grid market is now the Exhibition Road market in Bihar which is one of India’s most backward and poor states. The market has been created by free market economics as the Indian Government gives subsidies almost entirely for the grid connected large solar farms.

Business Insider

“Today, you’d need to charge $375 per megawatt hour to justify investment in new solar equipment—nearly four times the average US retail price of electricity,” writes Catherine Wood of AllianceBernstein. “That’s why solar energy requires steep subsidies.” Other power-generating technologies require a much lower price of electricity to attract new investments—from $95 per megawatt hour for new-built nuclear power generators to $130 for new-built wind power generators. Investments in gas-powered and coal-powered generating plants require a price between these two, even if you factor in paying $50 per metric ton to offset the carbon emissions and gas prices more than double their current level.