Today, solar power costs more than twice as much as the 5.42 rupees perkilowatt-hour that it costs to deliver electricity to consumers.

The cost of fossil-fuel electricity may rise as much as 5.5 percentannually as India has to buy more expensive imported coal and replaceaging plants, Kamath said. The country’s coal deficit may triple overthe next five to seven years, a unit of Moody’s Investors Service saidin a February report.

Solar power prices are projected to decline by 7 percent a year inthe next decade on more efficient technologies and lower manufacturingcosts, the report said.

If solar power becomes competitive with other sources, India couldadd 39,070 megawatts of grid-connected solar projects from 2017 and2022, including residential rooftop panels and 18,455 megawatts ofsolar-powered telecommunication towers and agricultural water pumps,according to the report.

The government has set a target of installing 22,000 megawatts of solar power capacity by 2022.
India, Asia’s third-largest energy consumer, may be able to produceelectricity from the sun as cheaply as from coal and other fossilfuel-based power plants by 2017, according to KPMG LLP.

India may install three times as much solar capacity as thegovernment intends by 2022 if sun-powered electricity is able to matchthe cost of conventional power, a point referred to as grid parity, said KPMG’s Executive Director Santosh Kamath, lead author of a solar report to be released this week.

“We are heading for grid parity and it’s just a question of when,”Kamath, who heads the advisory firm’s India renewable energy practice,said in a phone interview. “In that scenario, the adoption of solarbecomes entirely market-driven.”

India, which produces 71 percent of its electricity from coal, seeksto add 120,000 megawatts of power by 2017 to reduce blackoutsthreatening development in the world’s second-fastest growing majoreconomy. Indian companies have announced about $7 billion of overseasenergy acquisitions since January 2010 as they seek coal, uranium andother fuels, according to data compiled by Bloomberg.