To deal with cost of solar cells in India, the first and foremost factor to recognize is the power shortage of 15% in the nation. This automatically opens up a market for renewable energy, and with the National Solar Mission launched in January (aim of 20,000 MW by 2022) making considerable headway in its first year, there is scope for solar cells prices in India to follow the downward trend seen around the world. But a number of aspects need to be considered – factors affecting solar cells costs in India, how to lower price of solar cells in India and what future expectations to have of solar cells prices in India.

WHAT AFFECTS SOLAR CELLS COSTS IN INDIA?

The cost of solar cells in India is dependent on several variables.

Firstly, the fact that raw materials and components in solar cell technology still have to be imported to some degree – like the vital silicon wafers – raise the price of solar cells in India. Secondly, the type of technology being followed by photovoltaic (PV) cells manufacturers is of the first generation kind – that is, crystalline silicon as the semiconductor, which is as of now the most efficient but also the most expensive. This undoubtedly keeps solar cells costs in India at a higher level than if manufacturers of solar cells in India were to mass-produce solar modules with second generation technology using film thin substances.

Thirdly, lack of proper infrastructure and proper know-how is severely limiting the potential for solar cells prices in India to fall. Granted, thin film technology has entered India, and yes, the government in currently in the midst of providing several incentives for solar cell manufacturers in a bid to lower price of solar cells in India, but thin film technology is not yet at the stage of mass-production, and financial crunch is incapacitating several companies from jumping in. Thus cost of solar cells in India remains higher than it could potentially be.

NECESSARY STEPS TO LOWER PRICE OF SOLAR CELLS IN INDIA

The above complications also provide solutions to affect solar cells costs in India.

For one, the government needs to step up incentives and research funding to lure companies into the solar cell market so that cost of solar cells in India can compete aggressively with those manufactured, in say, China. Take Japan and Germany as examples, who remain solar cell price competitors, in part because of large government subsidies. Cost of solar cells in India would be lowered through similar government action here.

After all, the solar cell is the basic device used to create solar products, thus of significant value. Solar cells prices in India would need to drop to a level deemed competitive enough to continue manufacture of further solar products. The Indian government has recently started on the path that leads to lowering of solar cells cost in India, with SIPS, feed-in tariffs and a Clean Energy Fund.

Then, the arrival of thin film technology in India needs to be pursued, as it introduces price competitiveness and thus a potential forecast of falling price of solar cells in India. Thin film solar cells, of which amorphous silicon ones are the best developed, are more flexible, less costly and more easily installed than first generation devices. The low conversion rate only presents Indian companies with a chance to lower solar cells prices in India through researching and developing methods to increase electricity yield. Home-grown technology would definitely be the best way to lower cost of solar cells in India.

Government schemes and thin film technology have both led to major investments already being made, such as by newcomer Moser Baer. Investments in solar panel manufacturing plants (where capital costs are still quite high) would be a definite step towards diminishing solar cells costs in India.

There is also a need to take stock of the Indian situation to be able to fully enjoy reduced solar cells prices in India. There are many villages not linked to the power grid – remote area solar applications would greatly benefit such locales. Clean drinking water is a persistent problem and solar desalination through solar-cell operated electro-dialysis instead of conventional solar still are better suited – thus development of this field would benefit solar cell technology – and help optimize price of solar cells in India. High temperatures in many parts of the country dictate better efficiency rates through thin film solar cells.

FUTURE TREND EXPECTED OF SOLAR CELLS PRICES IN INDIA

Solar cells costs, measured in price per watt peak, have lowered drastically from $27/Wp during early 1980s to about $4/Wp at present (for >125 watts).

Solar cells costs in India (locally manufactured PV units) will undoubtedly follow the same trend, though initial cost of investment will run high. But as technology advances and more companies enter the playing field, market competitiveness will help lower price of solar cells in India. Furthermore, since India isn’t a great party to the capital crunch, there is greater scope for investment by Indian companies in R&D which will pay off in the long-run through resultant cost of solar cells in India. Japan, for example, spends a great deal more in research than USA and Germany, and is currently enjoying low solar cell costs.

Relating to the cost of solar cells in India, it is worth keeping in mind the cost per unit of solar power generation is Rs.15-17, much higher than coal-based electricity generation cost, in the range of Rs.4-9. Adoption of thin-film technology, organic cells and Concentrated Solar Power would go a long way in stabilizing solar cells prices in India to a competitive level.

Greater awareness and the NSM will create increasing demand over the next coming years in India – industrially as well as in residential areas. Price of solar cells in India will fall if manufacturers of solar cells rise to the occasion. Solar energy is a long-term investment; the same applies to solar cells costs in India. Solar cells prices in India at the retail level are okay, but at factory level, the cost of production is high. Through continued investment and technical innovation, solar cells costs in India will gradually become competitive at the global stage.