The economics of solar power, the challenges in scaling it and how localised manufacturing and innovation can help increase adoption

Byline- Rajeev Kashyap

Rapid urbanisation, economic growth, and technological advancements have significantly increased global power demands. According to the Central Electricity Authority, India’s electricity generation surged 15.06 per cent in May 2024, reaching 167.55 billion units due to a prolonged heatwave. As India moves towards universal electrification, sustainable solutions to meet these demands are crucial. Solar energy, with its abundance and affordability, is the optimal solution for India’s energy needs. By harnessing this renewable resource, India can achieve net-zero emissions by 2070 and become the world’s third-largest energy producer by 2030.

The Solar Economics

Solar power has emerged as the most cost-effective energy source globally, driven by technological advancements and economies of scale. According to the International Renewable Energy Agency, the cost of solar panels has decreased in the last decade making solar energy increasingly accessible. A key factor in solar power’s affordability is the decreasing cost of solar PV systems, which now compete with fossil fuels and other renewables. Between 2016 and 2022, India experienced the most significant reduction in the levelised cost of electricity for utility-scale solar projects, aided by the availability of low-cost solar cells.

Technological innovations have also enhanced the reliability of solar power. Integrating battery storage systems with solar PV installations mitigates intermittency, ensuring a steady energy supply even during non-sunny hours. Advanced storage solutions, like lithium-ion batteries, enable solar energy to be stored during peak production and dispatched during high-demand periods, stabilising electricity prices and enhancing energy security.

Innovations in solar technology have further boosted the efficiency of PV systems. High-efficiency solar cells, such as monocrystalline and bifacial types, have increased energy conversion efficiency from about 15 per cent to over 22 per cent, according to Clean Energy Reviews. Additionally, solar trackers that adjust panel angles based on the sun’s position can enhance energy generation by up to 30 per cent, optimising solar installation performance.

Navigating The Challenges

Despite the promising outlook, land availability remains a significant challenge to scaling solar electricity in India. To address this, innovative land-use solutions are essential. Terrain-following solar trackers can maximise energy generation on uneven terrains without extensive leveling.

Extreme weather events also pose challenges to solar infrastructure. Advances in predictive software and stowing capabilities help mitigate these risks. Predictive software forecasts weather conditions to optimise solar operations, while stowing capabilities adjust panel positions to minimise damage during severe weather, enhancing resilience and reliability.

Localised Manufacturing & Innovation

To accelerate solar adoption, India should enhance localised manufacturing and R&D. A strong domestic market with a robust supply chain can reduce import dependency, lower costs, and create jobs across the value chain. Tailored regional R&D programmes can foster the development of technologies that address local challenges.

The Indian government has initiated several programmes to support this growth, including the Production-linked Incentive scheme, which promotes domestic manufacturing of solar modules and clean energy equipment.

As India stands on the brink of a solar revolution, fueled by economic growth and the urgent need for sustainable energy, it can seize the opportunity to harness its abundant solar resources. By addressing existing challenges, India can lead the world in renewable energy adoption and pave the way for a greener future.