India’s biggest corporates turn to solar – it’s cheaper than grid

It seems that Coal India – the world’s largest coal company – is not the only one turning to solar in India because it is cheaper than the predominantly coal-fired grid.

Tata, the country’s biggest industrial group which also has a thriving solar business, says many of the biggest companies in the country are turning to solar because it is cheaper than grid in some states. It expects this will be the case in most Indian states by 2016.

Companies that have already turned to solar include the country’s biggest carmaker, Maruti Suzuki, and the local units of computer giants Dell and IBM.

Ajay Goel, the head of Tata’s solar division, Tata Power Solar Systems, told Bloomberg that solar installations for commercial and industrial consumers represents a market of around 80 billion rupees ($1.4 billion).

“We’re seeing a huge uptake as we get closer and closer to grid parity,” Goel told Bloomberg in a phone interview. “Corporate customers are coming to us to install solar on their rooftops or land on the side of their factories because it can provide energy cheaper than from the grid.”

Goel told Bloomberg that commercial consumers such as hotels and shopping malls, which pay the highest rates for electricity from the grid, can already generate solar power cheaper in 10 percent of India’s 35 states and territories. That will be true in 60 per cent of India’s states and territories, and in 80 per cent if government subsidies are taken into account.

Depreciation benefits can mean the investment can pay for itself within one year, and the economics improve further when taking in the cost of diesel – around twice the price of solar – which is used during blackouts, which are a daily occurrence in India’s strained electricity grid.