India’s “Solar Mission” to install 20,000MW of solar power by 2022 has recently had a boost following the news that electricity from solar power is now cheaper than that produced by diesel generators. Making them a cost effective alternative to many people in developing countries.
According to figures by market analysts Bloomberg, the price of solar panels fell by nearly 50% in 2011 alone, and they are currently just one quarter of the price they were in 2008.
According to the International Energy Agency’s 2011 World Energy Outlook report, a quarter of India’s population do not have electricity, and those that do experience frequent blackouts due to a supply deficit. Many homes and factories install diesel generators, but they are expensive to run, produce carbon dioxide, and have been linked to health problems such as respiratory and heart disease, and cancer.
Amit Kumar, the director of energy-environment technology development at the Energy and Resources Institute in New Delhi, suggested that households may be put off from buying solar panels due to the high initial cost because they are more expensive than diesel generators. However he assures that they will earn that difference back after seven years and that the solar panel will continue producing cheap electricity for 25 years.
Solar panels are still very inefficient, converting just 15 – 18 percent of the energy into electricity, but due to economies of scale the production costs have fallen drastically. Jenny Chase, head of solar analysis at BNEF said that solar power is now cheaper than diesel “anywhere as sunny as Spain”, opening up the possibilities of cheap electricity to vast areas of Latin America, Africa and Asia.
Solar Power still remains twice as expensive as electricity produced in coal power stations, but if the current trend continues this situation may soon change. The in-house analysts at Suntech, the world’s largest producer of silicon panels, have stated that by as soon as 2015 solar electricity will be as cheap as grid electricity in half of all countries.
By. James Burgess of Oilprice.com