Solar modules to cost less with volumes, says Solarplaza chief

V. Rishi Kumar Hyderabad | Updated on January 18, 2011 Published on January 18, 2011

Investment costs for the sector continue to be major issue

Like every passing year better cars are introduced with more features, solar modules will get cheaper as production volumes increase as is the case with the lowering prices of flat screens, according to Mr Edwin Koot, Chief Executive Officer of Solarplaza, the Netherlands-based company.

In India there is limited experience with solar power purchase agreements (PPAs).

This is crucial for the sector's growth of the sector in making projects financially viable.

He maintains that investment costs continue to be major issue as developers require at least 15-20 years loan options with attractive interest rates.

Solar potential

According to Mr Koot, whose company is hosting a two-day event ‘The Solar Future: India 2011' during January 24-25 in New Delhi, “India is endowed with abundant sunlight 300 days in a year and with the Jawaharlal Nehru National Solar Mission in place and many State Governments encouraging the growth of the sector, India today has the potential to become a solar super power.”

“We have studied the development of many photo-voltaic markets. One can conclude that it takes at least three years to develop a market. Even in Spain, with most attractive feed-in-tariff regime, in its first year only 11 MW was installed.

“In the fourth year, the market started to boom to a size of couple of 100 mw. Other markets had similar pattern. Therefore, the seemingly small market in India could really get big and has the potential to become amongst the largest in the world,” he explained.

“The prices will come down but depends on the developments in other major markets such as Germany. The consumption in markets such as Germany will have impact on the global demand for solar modules.

“The market is expanding globally and competition will get fierce, and may lead to some oversupply. This will trigger price correction. In the meantime, with manufacturing growing, production cost will come down. For production, the only way is up. For cost and prices, the only way is down,” he felt.

For international companies, India is not an easy market to enter. The global industry understands India is a natural market and has all ingredients to create a solar future. Given the current project initiatives, India could see the addition of 500 MW in 2011.

However, in the next two years India has potential to become a multi-gigawatt market, making it amongst the biggest, he explained.

“Instead of wiring the whole country with telephone lines, the consumers in India went straight to mobile phones. Similarly it makes sense to build and expand distributed energy source rather than expanding it with grid connectivity,” he felt.

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Published on January 18, 2011
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