10. Solar Energy Pricing

As an alternative option, solar energy has shown its high level of potential, seen as efficient and environmentally friendly source. The chapter focuses on two major aspects of solar energy pricing: (i) equipment-related factors and (ii) financing costs. One of the reasons for choosing a few components is due to their main contribution in price of raw material, different components such as PV module, installation, handling cost, as they constitute major cost in determining the electricity tariff (so-called solar energy pricing). Other components governed and helped in reducing solar energy pricing due to various financial approaches of estimations, outlook of stakeholders, and government schemes. In addition, literature shows that photovoltaic power systems will play a key role in electricity generation in the future. In this context, levelized tariff (solar pricing) of using the proven technology, through the life cycle assessment has shown many fruitful results, whereby prices found decreasing drastically over the last few years. Because price analysis is very important for energy marketing, in this chapter, a review of the cost potential factors on solar energy pricing and a reflection on related factors is shown. Further, by dissecting specific examples of competitively determined Indian solar tariff into its respective constituents, it illustrates their relative contributions to overall RE tariffs. Lastly, this chapter highlights areas that represent opportunities for increasing the competitiveness of solar energy pricing in the years to come and discusses policy measures for accelerating future tariff reduction from solar energy.