It causes concern that  the likely price of solar power  in India  may  be in the region of
Rs. 14/- to 15/- per unit  which is beyond the buying capacity of the consuming industry and domestic consuming sector in the country.

Solar power equipment and poly crystalline silicon are the main factors contributing to the cost of production of solar power, unlike in the case of coal and natural gas based power projects where fuel accounts for around 70 to 75% of the power generating cost. 

China  is the global leader in solar photovoltaic equipment and holds around 50% of the global market share. Indian equipment are not competitive in the global market.  There is no indication that the price of the solar equipment in the global market would come down in the immediate future.

For every megawatt of solar power, 10 tonnes of poly crystalline silicon is required.  In other words , for the targeted 20000 MW of solar power in India   by 2022, the requirement of polycrystalline silicon would be around  two lakh tonnes.  India does not produce poly crystalline silicon at present and no project for poly crystalline silicon is in the advanced stage of planning or implementation at present.  While India is seeking to build  20,000 MW of solar power capacity, no thought has been given for capacity creation  for poly crystalline silicon in India so far.  Therefore, the Indian requirement of poly crystalline silicon have to be entirely met by imports and India will be at the mercy of international producers and particularly producers in China for its poly crystalline silicon requirement, and global producers are bound to increase the price of poly crystalline silicon ,  as the helpless Indian solar power industry would seek import of poly crystalline silicon.  Indian solar power industry  would be subjected to huge and intolerable price pressure from the international price cartel , as it is just now happening in the case of many other products  such as potash fertiliser which is not produced in India.

Under the circumstances, any significant fall in the cost of production of solar power is unlikely.

Any  significant fall in the price of solar power may happen marginally by increased efficiency of solar power projects , that require huge research and development efforts.

Obviously, the Government of India and state governments have to give huge subsidy support in price for the solar power , to make it affordable for the  consuming  industry  and the domestic consuming sector.  It is still not clear as to whether the governments would be in a position to extend such price subsidy support , given the present precarious state of finances of several state governments and the huge subsidy burden already carried by the central government.

Under the circumstances, it is important that the Government of India should  make a proper pricing forecast for solar power and put it in public domain, so that the investors, public and financing agencies would be aware of the  real scenario.