Sri Lanka recorded 714 MW of solar panel production capacity by the end of 2022, according to the International Renewable Energy Agency.⁵

⁶

• The government of Sri Lanka has set ambitious targets to harness the country’s abundant solar energy potential, aiming to achieve 1,000 megawatts (MW) of solar capacity by 2025. This initiative is part of a broader strategy to significantly increase the share of renewable energy in the country’s energy mix.
• By 2030, the government aims to generate 70-80% of the country’s electricity from renewable sources, a substantial increase from the mere 2% recorded in 2018.
• This bold vision demonstrates Sri Lanka’s commitment to transitioning towards a more sustainable and environmentally friendly energy future.

In Sri Lanka, the average cost of electricity generation varies depending on the source:⁷

Hydropower

Approximately 0.0132 to 0.0165 USD per kWh.

Coal

Approximately 0.033 to 0.0429 USD per kWh.

Thermal oil:

Over 0.099 USD per kWh.

Non-conventional renewable energy:

Approximately 0.05544 USD per kWh.

Distribution of electricity generation in Sri Lanka is given below:⁸

With current fuel supply restrictions and thermal plant unavailability, load shedding has been extended even up to 13 hours per day with an increase in tariffs as well.⁹

Current Installations⁸

By Solar Rooftop Schemes total capacity of 640,122 kW from 44,022 installations are added. Following is the breakdown of installations.

Net Metering:

• Consumers: 14,003
• Capacity: 102,662 kW

Net Accounting:

• Consumers: 26,997
• Capacity: 236,806 kW

Net Plus:

• Consumers: 3,022
• Capacity: 300,654 kW

Projected Installations

Not specified

Installed Solar Farms¹⁰

Currently, there are five major solar farms in Sri Lanka: Hambantota, Laugfs, Maduru Oya, Sagasolar, and Solar One Ceylon.

Projected Solar Farms¹¹¹²

There are two significant solar farms in future.

• The 100 MW Solar PV Project at Siyambalanduwa
• Hambantota Solar PV Park

Current Demand¹³

• Sri Lanka has made notable progress in harnessing off-grid renewable energy, with a total installed capacity of approximately 8 megawatts (MW) from off-grid renewable energy technology systems.
• These systems have successfully electrified around 130,000 households in off-grid areas, providing vital energy access to rural and remote communities.
• The ongoing energy crisis and escalating fuel prices have intensified the demand for off-grid solar solutions, driving growth in this sector.
• As a result, off-grid solar systems have emerged as an attractive alternative energy source, offering a reliable and sustainable solution for energy access in areas where grid connectivity is limited or unavailable.

Projected Demand²⁶

• Exact number is not available, a continuous growth in the off-grid solar market is projected in Sri Lanka, driven by policies and investments aimed at expanding energy access and promoting renewable energy.
• The emphasis on decentralized renewable energy solutions and the increasing awareness of the benefits of off-grid solar systems suggest a positive growth trend in the coming years.

Current Demand¹⁴

Grid-connected rooftop solar accounted for 147 MW while large-scale solar farms contributed 17 MW.

Government Support: The “Battle for Solar Energy” initiative aims to significantly increase solar PV capacity, with targets set to achieve 1,000 MW by 2025. This initiative is backed by strong policy support and financial incentives.

Existing Market Conditions: The introduction of net metering in 2008 and subsequent models like net accounting and net plus have facilitated rapid growth in rooftop solar installations. By the end of 2016, the net metering scheme alone had installed 58 MW capacity across residential, institutional, and commercial sectors.

Future Market Demand

Projected Growth: The demand for grid connected solar systems is expected to grow further, driven by:

• Economic Growth: Continued economic expansion leads to higher energy consumption.
• Substitution Effect: Switching from fossil fuels to renewable due to technology cost reductions and environmental benefits.

Financial Incentives: With government-subsidized loan schemes offering attractive terms (e.g., 6-8% interest rates), the financial viability for consumers and businesses to invest in rooftop solar remains strong.

Market Potential: Based on tariff structures and consumption patterns:

There’s a significant untapped potential, especially among residential consumers with high electricity tariffs (above $0.105/kWh).

Market studies indicate a potential demand for up to $140 million if lending rates decrease to 10%, primarily driven by residential consumers consuming over 210 kWh/month.

A Solar Photovoltaic Installer working in Sri Lanka will typically earn around:¹⁵

• Average Salary: ~2,147.64 USD per year
• Lowest Average Salary: ~1,052.04 USD per year
• Highest Average Salary: ~3,337.29 USD per year.

The current population of Sri Lanka is 21,950,569.¹⁶

Estimate for Factory Rent¹⁷

Average Warehouse Rental Cost

The average warehouse rental cost in Sri Lanka varies based on location, size, and facilities. However, the range for rent per square foot is from approximately $0.13 USD to $0.26 USD per sqft. Rents in some of areas are as follows:

• Uswetakeiyawa: A brand-new 24,000 sqft warehouse is available for rent at $6,336 USD per month.
• Negombo: A 2,000 sqft warehouse in Negombo is priced at $495 USD per month.
• Wattala: A 10,000 sqft warehouse in Wattala is available for $2,145 USD per month.
• Dankotuwa: A 52,000 sqft industrial warehouse on Kuliyapitiya Road is priced at $6,600 USD per month.
• Colombo: An 8+ room warehouse on Dharmarama Road is available for rent at $1,287 USD per month.

Business Electricity Price (December 2023)

The electricity price for businesses is USD 0.139 per kWh.

Average Water Prices (2021-22)¹⁸

The cost structure of tap water supply in Sri Lanka indicates that water is currently underpriced. The estimated marginal cost of water supply ranges from approximately $0.05 USD per cubic meter) to approximately $0.16 USD per cubic meter.

Key Components of Administrative Costs

Salaries and Wages:

• Average Salary: ~2,147.64 USD per year
• Lowest Average Salary: ~1,052.04 USD per year
• Highest Average Salary: ~3,337.29 USD per year.

Rent for Office Space¹⁷

If the administrative office is separate from the factory, rental costs for the office space;

• Lower Limit: for Mount Lavinia, with a 2,400 sqft office/storeroom, approximately $365 USD per month.
• Upper Limit: for Colombo, with a spacious 7,000 sqft office space, approximately $2,321 USD per month

Electricity Generation¹⁹

• In 2022, Sri Lanka’s total electricity generation experienced a decline of 4.6%, dropping to 15,942 gigawatt-hours (GWh) from 16,716 GWh in 2021.
• This decrease was primarily attributed to disruptions in coal and fuel imports, which are essential for thermal power generation. Despite this setback, the country remains committed to its ambitious energy targets, aiming to increase its power generation capacity from the current 4,043 megawatts (MW) to 6,900 MW by 2025.
• A significant aspect of this plan involves a substantial boost in renewable energy sources, aligning with the country’s objective of achieving a 70% renewable energy target by 2030.
• This strategic initiative underscores Sri Lanka’s dedication to diversifying its energy mix and ensuring a more sustainable energy future.

Transmission & Distribution²⁰

• Sri Lanka’s electric transmission network is primarily composed of 132 kilovolt (kV) infrastructure, supplemented by a 220 kV backbone transmission system. This higher-voltage backbone plays a critical role in connecting major electricity generation sources to the capital region, facilitating the efficient transmission of power across the country.
• The 220 kV transmission line serves as a vital artery, ensuring a reliable supply of electricity to meet the energy demands of the capital and surrounding areas, while the 132 kV facilities provide a robust foundation for the overall transmission network.

Energy Access²¹

• Sri Lanka electricity access for 2021 was 100.00%, a 0.03% increase from 2020.

Energy Exports²²

• Sri Lanka’s energy export profile is presently dominated by its natural resources, including tea, rubber, and gems, with electricity exports playing a relatively minor role.
• However, the country recognizes the potential for regional electricity trade and is actively exploring opportunities to expand its energy export capabilities.
• Meanwhile, Sri Lanka continues to rely on imported oil for a significant portion of its energy generation.
• Nevertheless, the government is actively pursuing a strategic shift towards increasing its renewable energy capacity, aiming to reduce dependence on imported fuels and mitigate the associated environmental impacts.
• This transition is expected to enhance Sri Lanka’s energy security and potentially position the country as a future exporter of clean energy.

²³²⁴Environmental Conservation Act No. 47 of 1980

• Mandates environmental impact assessments (EIAs) for industrial activities, including solar panel manufacturing facilities.
• It regulates pollution control, waste management, and sustainable practices to mitigate environmental imp

Sri Lanka Sustainable Energy Authority (SLSEA) Act No. 35 of 2007

• Establishes SLSEA to promote and regulate sustainable energy development, including solar power. SLSEA oversees licensing, permits, and compliance for solar energy projects and manufacturing operations.

Regulatory Requirements

• Solar PV service providers must register with the Sri Lanka Sustainable Energy Authority (SLSEA) and adhere to stringent guidelines. These guidelines cover the entire process from initial survey and design to installation, commissioning, and post-installation support.
• Standards for safety, performance, and durability of solar PV systems are mandated to ensure reliability and longevity. This includes warranties for components like solar modules and inverters, with specific performance guarantees.

Safety and Compliance

• Solar PV must adhere to applicable international standards and industry practices.
• The Sri Lanka Electricity Act requires parties to obtain a license from the Public Utilities Commission of Sri Lanka (PUCSL) before generating and selling electricity to the national grid

Following are details about regulations and subsidies related to solar panel production and installation in Sri Lanka.²⁵

Feed-in Tariffs (FiTs) and Incentives

• Under the Net Metering Scheme, consumers can offset their electricity bills by supplying excess solar electricity to the grid. Any surplus electricity generated is credited and can be carried forward as a credit for up to ten years.
• The Net Accounting Scheme offers a payment of Rs. 22.00 per unit for surplus electricity fed into the grid during the first seven years of operation, and Rs. 15.50 per unit thereafter.
• The Net Plus Scheme allows consumers to install separate meters for import and export of electricity, receiving payment for all electricity generated while paying only for consumed electricity.

Financial Support and Funding

• The Rooftop Solar Power Generation Project, supported by a US $50 million credit line from the Asian Development Bank, provides accessible financing for rooftop solar installations. This initiative aims to reduce the upfront costs for consumers and businesses interested in adopting solar power.

SLSEA Training and Capacity Building

• SLSEA conducts comprehensive training programs for professionals and technicians involved in solar energy system design, installation, and maintenance. These programs enhance skills in solar technology and ensure compliance with national standards.
• Special initiatives like the Women in Solar program focus on increasing female participation in the solar industry, thereby promoting gender equality and diversifying the renewable energy workforce.

Public Awareness and Support

• The “Soorya Bala Sangramaya” initiative actively promotes public awareness and participation in solar energy adoption. It encourages households, religious institutions, commercial establishments, and industries to invest in solar power generation, contributing to energy independence and environmental sustainability.

Installed Projects⁸

Small Scale Ground Mounted Solar Power Plants:

• This project involves the installation of 70 small-scale ground-mounted solar power plants, each with a capacity of 1 MW.
• As of September 2022, 20 power plants with a total capacity of 20 MW have been connected to the national grid, with an additional 5 MW completed in 2022.

2X10 MW Solar Power Plants (Valachchena & Vavunatheu):

• Two solar power plants, each with a capacity of 10 MW, were officially opened on October 11, 2022.

1-10 MW Solar Power Plants:

• This project comprises various solar power projects with capacities ranging from 1 MW to 10 MW, totaling 147 MW.
• Tenders were awarded for projects totaling 109 MW on March 2, 2021, and provisional approval was granted for 88 MW by the Sri Lanka Sustainable Energy Authority (SLSEA). A 2 MW project commenced operations in 2022.

100 MW Siyambalanduwa Solar Power Park:

• A 100 MW solar power park is being developed in Siyambalanduwa.
• However, the project’s commissioning is contingent upon the upgrading of the Madagama-Ampara Transmission line, necessary for power evacuation.

Projected Projects

Siyambalanduwa 100 MW Solar Power Project

Capacity: 100 MW

Location: Siyambalanduwa, Sri Lanka

Details: The Siyambalanduwa 100 MW Solar Power Project aims to establish a significant solar power generation facility in Siyambalanduwa, Sri Lanka. Here are the key details:

• The project issued a Request for Proposals (RFP) in August 2022 to select a suitable developer for the initiative.
• Access roads to the project site are currently under construction to facilitate logistical access for construction and operational activities.
• A weather station has been established to collect one-year data for effective design and operational planning of the solar power station.

Pooneryn Renewable Energy Park Project

Capacity: 233 MW (wind) + 150 MW (solar)

Location: Pooneryn, Sri Lanka

Details: The Pooneryn Renewable Energy Park Project aims to develop significant renewable energy capacity through a combined wind and solar initiative. Here are the project details:

• Currently undergoing assessment to evaluate and mitigate potential environmental and social impacts associated with the project.
• The project plans to achieve a total capacity of 233 MW from wind power and 150 MW from solar power.
• The initial phase of the project focuses on developing 100 MW of wind power capacity.

Vortex Energy (Pvt) Limited

Website: https://vortexenergy.lk/top-10-solar-companies-in-sri-lanka/

What They Do

• Vortex Energy is a leading solar energy solutions company in Sri Lanka. They specialize in providing residential PV systems, commercial solar PV systems, utility-scale solar farm systems, energy storage systems, solar panels, inverters, and EV charging systems.
• The company aims to promote sustainable energy solutions and has a strong commitment to environmental stewardship and community empowerment.

Vivid Energy Solutions (Pvt) Ltd

Website: https://vividenergy.lk/

What They Do

• Vivid Energy Solutions specializes in solar energy solutions in Sri Lanka.
• They offer services including on-grid hybrid solar systems, solar hot water systems, and documentary services related to solar installations.
• The company emphasizes eco-friendly practices and highlights the financial benefits of switching to solar energy.

SolarTherm – Alpha Thermal Systems

Website: https://solartherm.lk/

What They Do

SolarTherm specializes in solar energy solutions in Sri Lanka. They offer:

• Solar Water Heating Systems: Designed for both domestic and commercial use, optimizing heat absorption and efficient heat transfer.
• Solar Electricity Systems: Includes residential and commercial solar PV systems, generating electricity from sunlight using solar panels.

Jude Fernandopulle Associates (Private) Sun Bird Limited (JFA)

Website: http://www.sunbird.lk/

What They Do

JFA is a solar energy manufacturer and service provider in Sri Lanka. They offer:

• Sunbird Solar Hotwater Systems: Custom-built solar hot water systems for residential and commercial use.
• Sense PV Solar Energy Systems: Solar PV systems designed for generating electricity from sunlight.