NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Friday, March 25, 2016

The price of solar power has plummeted in recent months to levels rivaling that of coal, positioning the renewable source as a viable mainstream option in a country where 300 million people live without electricity.

Solar prices are now within 15% of coal, according to KPMG. If current trends hold, the consultancy predicts electricity from solar will actually be 10% cheaper than domestic coal by 2020.

And that could turn out to be a conservative forecast. At a recent government auction, the winning bidder offered to sell electricity generated by a project in sunny Rajasthan for 4.34 rupees (6 cents) per kilowatt hour, roughly the same price as some recent coal projects.

“Solar is very competitive,” said Vinay Rustagi of renewable energy consultancy Bridge to India. “It’s a huge relief for countries like India which want to get more and more solar power.”

Prime Minister Narendra Modi has made access to electricity a top priority, and has set the goal of making 24-hour power available to all 1.3 billion Indians. Currently, even India’s biggest cities suffer from frequent power outages.