Solar worries
April 4, 2010 1 Comment
Punjab joins the list of states setting up solar power projects.
“The Punjab government, in collaboration with US-based SunPower Corporation and Enterprise Business Solutions (EBS), has decided to set up solar power plants in the state. The plants are expected to generate 1,000 Mw over the next two years”
Its a decent start. Punjab has installed power capacity of 6000 MW – and adding solar capacity of 500 Mw is a pretty good way to get green.
However, I am beginning to get a little concerned over the enthusiasm to go solar in India. It’s not clear, for instance, what the capex on this project will be and how that compares with other sources of electricity – and importantly with other solar plants worldwide. Is there a subsidy involved? Is this a competitive process? What are the metrics we are using to measure the effectiveness of this investment?
amtgrg
Gaurav Rastogi
Two MBAs, One Blog 
Amit:
Typical capex for a large scale solar plant should be around Rs 17 crore (170 MM) per Megawatt and for a large scale thermal power plant should be around Rs 5 crore per MW.
Assuming that thermal power costs around Rs 5 per unit (KwH) and an 50% load factor (to account for night time and cloudy days), the payback period for the solar power plant is less than 6 years.
Of course, considering ecological externalities, the payback to society is much quicker.