The solar equipment market is anticipated to grow with the reduction in prices of solar energy
India: The Tamil Nadu power
regulator TNERC have reduced the solar tariff from INR7.01 per unit to INR5.10
per unit without availing the benefit of accelerated depreciation, which is
expected to be effective from April 2016. In accordance with this, the Central
Electricity Regulatory Commission (CERC) and the state regulator have fixed the
capital cost, which is the primary determinant for setting the price that the
state power distributor would pay to the solar power generators, to INR5.0132
crore per MW and INR5.05 crore per MW, respectively. The Commission has taken
into consideration components such as PV modules, inverters, control panels
& such machinery along with land acquisition expenses and costs towards
power evacuation while setting the capital cost.
TechSci Research depicts that as the prices for solar energy continue to
decline, the Government target for achieving 100,000MW of solar power by 2022 seems
to be achievable. In addition to this, the government policies that promotes
local manufacturing through subsidies and anti-dumping duties would further
support the large scale production of equipment. Prices of solar panels
declined by 19% in 2013 and by 12% in 2014 due to technology advancements and
improvements in manufacturing processes, thereby making them cheaper. As a
result, the project developers are bidding aggressively for solar projects. As
of FY16, the price for solar energy in India have reached as low as INR4.34 per
unit.
According to released report of TechSci Research “India Solar Power Equipment Market Forecast &
Opportunities, 2020”, the solar power equipment market in India is projected to
surpass USD4 billion by 2020. Rising government investments in the sector,
increasing technological advancements, growing environmental concerns, government
support in the form of favorable policies, subsidies and tax incentives are expected
have a significant positive impact on the market in the ensuing years.