Solar Power Systems in India are Cheaper Than Coal Based Power

Renewable energy prices in India are crashing, leaving coal-based power plants in the country financially unviable in their wake.

Over the last year, solar power tariffs have fallen to a record low of around Rs 2.4 per unit, much lower than the average of Rs 3.7 per unit at which analysts say coal-based power is currently being sold on India’s power exchanges.

As a result, coal-based power plants are falling out of favour with power distribution companies (discoms).

“The (coal-based power) plants are ready but… no discom was coming forward for long-term PPAs (power purchase agreements) because they were getting power at a cheaper rate from renewable sources,” Sudhir Kumar, associate director at CARE Ratings

Last financial year, for the first time, India added more power capacity from renewable sources than coal.

Of India’s approximately 197,100 megawatts (MW) of coal-based power capacity, nearly 40,000 MW—or 20% of the plants—have been termed stressed assets, and a fourth of these have turned unviable.

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