India off to Slow Solar Start

21 July of 2009 by

Considering that roughly 56 percent of India’s 1.1 billion people do not have access to electricity and many generators still run on diesel, it might come as little surprise to renewable energy fans that the Southeast Asian giant recently announced its commitment to harness renewable energywith a heavy focus on solar power.  While only 3 percent of India’s current energy mix is renewable—biomass and wind—it plans to kick-start this number to 1,000 MW of solar a year, in addition to the promotion of other technologies. 

Prime Minister Manmohan Singh outlined the bold initiative in June 2008, when he announced India’s National Action Plan on Climate Change, which outlines existing and future policies for climate adaptation. The cornerstone of this plan is the National Solar Mission, a program that aims to develop solar power to the point where it is price-competitive with traditional fossil fuels. I hurrahed the measure when it was first announced, but it’s already been over a year since the Indian government set the NAPCC in motion—was it all just noise?

As the Washington Post shows, at least one government official believes that time is of the essence and that India’s shift to renewable energy is imperative.

“We need to get our act together,” said Gauri Singh, joint secretary in India’s Ministry of New and Renewable Energy, which was set up 26 years ago, “because India is growing faster than anyone can imagine. Renewable energy will have to supplement conventional power supply.”

In fact, one might wonder why a nation of India’s ambition, innovation and general technological prowess didn’t tap into renewable energy earlier. For years, China has been ramping up its production of solar panels and solar hot water systems, first primarily exporting to Europe and now targeting foreign and domestic markets alike. Given the cheap costs of production in these two BRIC nations, and India’s abundant sunshine (when it isn’t monsoon season), one might have expected it to have made a similar leap toward solar power production.

As it is around the world, however, the government plays a key role in the progression of solar power toward grid parity. Indian solar companies bemoan the lack of state incentives, the absence of which stymies growth. In the Washington Post article linked above, one executive of a solar company said that his company ended up exporting three-quarters of all solar cells and photovoltaic modules to Europe. Furthermore, the Indian government has made little effort to police the development of green energy plants, an oversight that has led to the existence of ghost plants that had been erected simply to take advantage of the tax credits. While the explosive growth of the Chinese solar market is due partly to the all-controlling hand of the Chinese government (Olympics, anyone?), the Chinese administration is notorious for its bureaucratic red tape, and until recently solar panels experienced very little installation within China itself. Suntech, China’s largest manufacturer of solar panels, relied heavily on Germany’s solar subsidies as it muscled its way to the top. Still, it has benefited greatly from the help of regional governments, some of which have consistently offered lucrative incentives for the adoption of solar power, independent of the central bureaucracy.

Countering its earlier inaction, the Indian government has pledged to do more to promote renewable energy use:

India has developed rules mandating that commercial buildings use solar energy to source 25 percent of their hot water supplies, but municipal bodies have been slow to comply. State power distribution companies are now required to buy a portion from renewable sources, and the government has announced plans to create a system of “renewable energy certificates” that states can trade.

While we can’t be sure how much of the officials’ pledges is talk and how much is real action, the solar companies themselves have not sat idle, and gone directly to the people.

But until policies enable them to contribute to the national power grid, solar companies are lighting up Indian homes directly. “In the last two years, we have developed a good off-grid rural market. We are selling solar home lighting systems that come with rooftop panels directly to villagers who have no access to electricity,” said Anil Patni of Tata BP Solar, an Indian joint venture with the U.S.-based BP Solar. The company works with rural banks to offer small loans of about $300 to villagers to set up solar lighting systems. “But though the arrival of a solar lighting system transforms the life of the rural family, true economies of scale in solar power will come only with grid connectivity.”

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