Bangalore, India [RenewableEnergyAccess.com] It has always been a foregone conclusion that solar photovoltaics (PV) makes sense in the rural parts of the developing world. We have seen reams of paper convincing policy makers, manufacturers, donors, multilaterals, bilaterals, etc., just how solar solves energy challenges for basic human amenities.
Over the years we have seen the costs of solar panels steadily come down, though not to the levels that many experts had predicted. The critical question always has been, at what point ($/watt) would solar PV make commercial sense for the rural areas of the developing world? I personally have never been clear what baselines people were using to compare against to reach their conclusions. I am not sure how convenience, reliability, better educational facilities, etc., have been transformed into financial figures on a spreadsheet. However, I sincerely believe from experience that solar PV is already very viable — provided accessible and affordable financing is created at the doorsteps of the rural people — thus I hardly paid attention to the future predictions of $/watt. Peak in Demand We all know now that, in the last 24 to 30 months, the cost of solar panels ($/watt) is increasing drastically (rather than decreasing as predicted by experts) and fingers are pointing toward Germany. The sudden boom in the German market and competition from the semiconductor industry has led to an imbalance in the supply and demand of feedstock. This has been one of the causes for the steady rise in solar module prices. Adding to the rise in prices has been the lack of availability of smaller modules, those that are required to power the meager load requirements of households in the rural areas of India, Sri Lanka, Honduras, Uganda or Fiji. Steady cash flow and decent profitability has forced the manufactures to weave away from manufacturing smaller modules, in order to cater to demand from Germany and other western countries. Rise in Disparity Documentation for the actual rise in the prices of smaller modules over the last five years, both in 37 watt and in 75 watt supplies, is shown below.