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Why Swaminathan Iyer got it wrong when he said “India should wait for five more years before trying to implement for big plans in solar.

On Sunday, 5th June 2015, one of India’s leading economic journalists, SwaminathanAiyar, in his weekly column “Swaminomics”, wrote that India should wait for five years before trying to implement big plans for solar (refer). He argues that solar is still a comparatively expensive energy generation technology and that because India is an evening peak country, increasing the share of solar would be a “double whammy”, by driving up indirect costs for thermal, peak power generating sources. As a result, he concludes, India should go all out on solar only after it is fully established that the cost breakthrough has been achieved and the technology is more mature. While there are interesting insights in the article, but we disagree with his conclusions. Here is why.

 

  • Solar costs are not as high as Swami claims. In fact, upcoming NSM bids will show that it’s neck to neck with new thermal projects.
  • India is an evening peak country right now but as the economy develops the peak will move into the daytime (cooling).
  • Global investors already see the social and economic appeal of solar and are moving out from coal to the sector.