The solar equipment market is anticipated to grow with the reduction in prices of solar energy

India: The Tamil Nadu power regulator TNERC have reduced the solar tariff from INR7.01 per unit to INR5.10 per unit without availing the benefit of accelerated depreciation, which is expected to be effective from April 2016. In accordance with this, the Central Electricity Regulatory Commission (CERC) and the state regulator have fixed the capital cost, which is the primary determinant for setting the price that the state power distributor would pay to the solar power generators, to INR5.0132 crore per MW and INR5.05 crore per MW, respectively. The Commission has taken into consideration components such as PV modules, inverters, control panels & such machinery along with land acquisition expenses and costs towards power evacuation while setting the capital cost.

TechSci Research depicts that as the prices for solar energy continue to decline, the Government target for achieving 100,000MW of solar power by 2022 seems to be achievable. In addition to this, the government policies that promotes local manufacturing through subsidies and anti-dumping duties would further support the large scale production of equipment. Prices of solar panels declined by 19% in 2013 and by 12% in 2014 due to technology advancements and improvements in manufacturing processes, thereby making them cheaper. As a result, the project developers are bidding aggressively for solar projects. As of FY16, the price for solar energy in India have reached as low as INR4.34 per unit.

According to released report of TechSci Research “India Solar Power Equipment Market Forecast & Opportunities, 2020”, the solar power equipment market in India is projected to surpass USD4 billion by 2020. Rising government investments in the sector, increasing technological advancements, growing environmental concerns, government support in the form of favorable policies, subsidies and tax incentives are expected have a significant positive impact on the market in the ensuing years.