I think many of you who are reading this blog would be also interested in discussing what is driving the solar energy market. Frankly, there are many drivers, both at macro and micro level but still the market is not pushing as we had expected. Everyone nowadays puts the blame on "Global Recession" for lower rate of investments in solar energy sector. But some companies such as Suryachakra group, Tata and very recently the Clinton Foundation have planned a huge investment in Gujarat's soalr energy sector. This is definately going to reap them benefits as in such times we get labor and materials at a cheap rate compared to when the economy is doing well. Think about it.
The key drivers according to me are:
Demand for Energy
> The accelerated pace of industrialization creates a massive demand for energy and corresponding investment into energy generation infrastructure and capacity
> In the first 8 months of this year, at least 80% of electric power generation in India
Economics
> Government policy has been to encourage cost reduction via the localization of Solar module manufacturing as well as awarding concession projects
Pollution Concerns
> One solution has been to reduce the use of coal fired power plants which release tons of harmful carbon into the environment
Government Support
> The central government has supported Solar industry growth aggressively via ambitious targets for installed capacity as well as Solar power related regulations to incentivize growth in infrastructure
Environmental concerns
> Kyoto Protocol obliges members to reduce carbon emissions in light of the harmful effects of greenhouse gas on the global climate
> In newly industrialized countries, the main concern has been mitigating the pollutive effect of burning fossils fuels
> Solar power is the obvious alternative due to its minimal impact on the environment
Need for a stable, sustainable resource
> Demand for energy is predicted to be almost 60% higher in 20 years whereas the supply of fossil fuel is soaring
> Major concerns exist over the reliance on imports as well as unstable prices of non renewable energy
> Solar, on the other hand is an indigenous and unlimited resource
Commodity prices set to keep rising
> Average global industrial electricity prices have increased by 46% between 1998 and 2006, while average global household electricity prices have increased 42% over that time
Dramatic fall in cost of Solar energy production
> The cost of Solar energy has more than halved over the last 20 years(1)
- In the early 1980s, when the first utility-scale PV modules were installed, Solar-generated electricity cost as much as 60 cents per kilowatt-hour. Today, state-of-the-art Solar power plants can generate electricity for less than 15 cents/kWh(2)
> This cost is comparable to that of non renewable resources, especially after factoring the external costs of fossil fuel energy
- e.g. new coal energy production costs approximately 5 – 9 cents per kwH
Significant improvement in technology
> Capacity, efficiency and visual design of Solar PV modules have improved dramatically
> A modern Solar Module is not only space efficient, but produces 20 more times electricity than what was available 20 years ago
