The solar energy tariffs in India have gone down by a rate of 40 percent in a span of just sixteen months. This decline is certainly beyond the expectations and forecast of any market. This is likely to cause a ripple effect and has started to be witnessed in countries like Australia, South Africa and UAE.
The Director of the IEEFA (Institute for Energy Economics and Financial Analysis) based in Cleveland, Tim Buckley says that the striking policy of the Government of India pertaining to more focus on the renewable sources rather than the conventional sources of energy like fossil fuels is an indication of the leadership of the country and acts as a global endorsement.
A new record was set by the solar energy tariff in this week. The lowest price is 2.62 rupees for one unit. This price is lower than the previous tariff by 12 cents. The shift towards an economy that has less carbon is contributing towards the Climate Agreement of Paris in the year 2015. The aim of this agreement is to make sure that that the emission of greenhouse gases is decreased by burning less of the fossil fuels.
Tim Buckley also said that the method of tapping the renewable energy sources is giving rise to several good opportunities. It is also acting as a source of electricity generation that is both diversified as well as new and in addition to this, it also improves the security of the energy. He also said that the withdrawal from the fuel imports has enhanced the balance of the payments, improved the currency and also effectively reduced the inflation caused by the process of importing goods.
He also said that the renewable energy sector of India is undergoing an enormous amount of scaling up as far as the in-bound investment is concerned.
In addition to the solar energy tariffs gradually going down, the power purchase agreements of renewable energy in India are at prices that have zero indexation.
Tim Buckley also stated that the prominent finance institutions like SoftBank, Morgan Stanley, Goldman Sachs, Macquarie Group and Brookfield as well as prominent global utility companies like Fortum, EDF, Enel and EnGIE are doing extremely well. This is providing finances to strengthen the growth in the number of jobs as well as investment.
He also said that India has drafted a plan called the 10 year Electricity Plan according to which the country is going to generate a renewable energy capacity of 275 Gigawatts by the year 2027. Under this plan, the country will be adding 72 Gigawatts capacity to hydro energy and 15 Gigawatts energy to nuclear energy. Tim Buckley said that though the target is ambitious, it is also doable.