Power now is generated by hydro-electric and diesel-fired thermal plants but the island also plans to build coal-fired plants to cope with growing energy requirements and prevent blackouts.
"The reality is that the investment cost of solar panels on a per watt basis is five dollars without import duty," Siyambalapitiya told seminar on alternative fuel resources for Sri Lankan industry.
"Maybe a large array can be bought at three dollars."
The seminar was organised by the Sri Lanka Ceramics Council, which represents the energy-intensive ceramics industry.
Other conventional technologies cost around one or two dollars per watt, Siyambalapitiya said.
Another problem with solar energy technology was utilisation with the maximum solar output being available only for 4.5 hours a day or one-sixth of the time.
This is compared with the 80-85 percent usage of conventional technology.
"Despite sunlight being free of charge, until the capital costs come down there's no way it can compete with large power plants," Siyambalapitiya said.
Apart from solar panels producing electricity for only 16 percent of the time, their economic life is only 20 years, he added.
"Wherever you see solar panels, there's a subsidy coming to the user."
The Sri Lankan government is trying to promote use of alternative energy technologies as well as reduce wastage in an effort to cope with the energy crisis.
The island's industries are also trying to reduce energy costs, which are the highest in Asia, according to recent studies.
According to a regional comparison of electricity prices, Sri Lanka is the most expensive for commercial customers.
The primary issue with high cost of energy in Sri Lanka is energy efficiency. Sri Lanka has to first address the energy efficiency in order to tackle power bill. Coal is cheap, however power plant cost money and investment needs to be recovered. The power loss within the CEB electricity distribution system is considerably high. Invest on the power distribution infrastructure in order to minimise line losses by 15%, CEB would save enough energy equivalent to a coal power plant. The investment could be recovered within 4 to 5 year instead of 20 years for a coal power plant. Other benefits, money saved on fuel, Man power, etc.
The next issue is the product mix. How could SL make the right balance between fossil fuels and renewable energy? This is where the decision makers i.e. so called experts and the politicians require to draw the blueprint for medium and long term.
The most suitable form to utilise the Solar energy in Sri Lanka is a decentralised approach, where the solar radiation falling onto the fabric of the building is used to meet a certain percentage of the energy requirement. This could be a house, office, warehouse, school, or even the lighting requirement of a factory. The argument for this approach is that one may spend money for fixtures and fittings i.e. Pay Rs. 50,000 for a light fitting because it look pretty and raise your status. What is the economic benefit of this fitting. This is where some form of state subsidy could help promote these concepts.
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