PV+Storage parity.. Not very far.. May lead to Utility death spiral..

Published by firstgreen on

The falling price of solar panels and energy storage systems, and increasing grid electricity tariffs, may lead to a situation, where the consumers may do away with their grid connection. In 2015, The Forbes published an study on the Utility death Spiral due to falling PV prices.. Now it looks real. As the solar is getting cheaper, the creamy consumers who contribute in the Discom revenue are getting away from grid electricity through installing the rooftop solar systems. The large commercial consumers are also shifting to the open access to get the cheaper solar power.

Discoms are fighting the battle of revenue generation, and imposing the cross subsidy surcharge on the open access consumers to the tune of Rs. 2.5/kWh, and discouraging the large Industrial consumers towards migration to solar and putting hurdles by withdrawing the net metering facility to C&I consumers. We are gradually heading towards a scenario where large number of Residential and C&I consumers are generating their own electricity and migrating off the grid electricity.

The typical cost of solar electricity to C&I consumers is about Rs. 4/kWh, while the grid electricity is about 8-10 Rs/kWh. If the net metering facility is not available to C&I consumers, they need to install a reverse power relay and about 20% loss of generation can be reasonably considered. It means even after the curtailment/non availability of net metering facility about 20-30% increase in the net landed price of electricity.

Getting off grid may not be a viable alternative to the large consumers, however the residential consumers are fed up with un stable electricity and poor quality of supply, are now considering the solar + Energy storage. Considering the solar electricity @ Rs4/kWH, and energy storage costing about Rs. 8/kWh, the effective price of the PV+ESS can be reasonably considered in the range of Rs. 12-15/kWh. Those consumers who are having their power back up through the DG sets, the net blended electricity cost is over Rs. 15/kWh.. This is the tippling point in the decision making where the PV+ESS breaches the grid parity.