Future brightens for solar power in India

The solar energy sector doesn’t have much to show off right now in terms of its contribution to the total power generation in India, but the recent dramatic drop in its cost of production for solar power is poised to herald sunny days for the clean energy.

"We will easily achieve the target of 20,000 megawatt capacity by 2022 set by the Jawaharlal Nehru National Solar Mission. But the sector faces challenges from the manufacturing side. But the high interest rate, which is as high as 13-14%, has been a main dampener for businesses to invest," said Deepak Puri, chairman and managing director of Moser Baer India, at the Pravasi Bharatiya Divas 2012 session on solar energy.

The recent auction for 1,100 MW of solar energy project (concentrating solar power and photovoltaic) held in last December saw bidding prices dipping to as low as 7.49 per unit, which is half the rate that companies accepted two years ago.

"A couple of years from now, we will see solar energy reaching grid-parity level for captive purposes. Rates have come down from Rs 18 per unit to Rs 8.5 level in two years’ time. Even if the capacity required to meet the Renewable Purchase Obligations (RPOs), which is set at 0.25% to 3% of the states total energy requirement, we are likely to see an investment of $50 billion," said Sanjay Varghese, chief operating officer of Lanco Solar Energy.

As per the Jawaharlal Nehru Solar Mission, states are mandated to purchase a minimum level of renewable energy called RPOs starting from 0.25% to 3% by 2022.

Focusing on one of the main challenges of controlling and storage of solar energy, Union minister for new & renewable energy Farooq Abdullah invited overseas Indians to invest and develop technology to take advantage of the strong potential of the country.

The decline in cost will be a trigger to open up the off-grid segment. Power generated by using diesel costs around Rs 15 per unit. Mobile towers alone generate 20,000 mw using diesel. Besides, agriculture and some segments of industry consume diesel heavily to meet power requirements. But availability of effective and advanced technology in storage will tilt the scale in favour of solar power, Abdullah said.

While India is considered to be the best destination for solar energy production after the US, it’s generation is less than 1% of the country’s total power production. The renewable energy constitutes 5-7% with maximum coming volume from wind power. In 2011, 180 mw of grid-connected solar power projects have been commissioned in the country and this figure will cross 500 MW by the end of this financial year.

Power generated during the past year from other renewable sources includes 2,827 MW from wind power, 310 MW from small hydro stations and and 498 MW from biomass totaling an installed capacity of 22,447 MW.

Buoyed by the allocation of 873 megawatt to Rajasthan by the Centre under the National Solar Mission phase -1 out of the 1100 MW, the state is planning to develop four solar parks of 1,000 MW capacity with a thrust on equipment manufacturing.

Speaking at the solar energy session on the first day of the Pravasi Bharatiya Divas -2012, chief minister Ashok Gehlot said, "Solar parks of 1,000 MW capacity will be set up in Jodhpur, Jaisalmer, Bikaner and Barmer. These enclaves will consist of various zones for activities like manufacturing, research and development, and training."

He said 722 companies have so far registered for setting up of solar power projects, with a cumulative capacity of 16,900 MW. Including the projects already registered and the additional projects proposed, the sector is expected to attract investments to the tune of Rs 16,000 crores, he added.

Gehlot further said Rajasthan enjoys many advantages in solar energy generation with abundant land availability, availability of solar radiation at 6-7 kWh/m2 and availability of raw material used in the solar energy sector – zinc, molten salt and solar glass.

Union minister for new & renewable energy Farooq Abdullah, the chief guest of the occasion, drew attention to the need for research and development to give a push to the sector. "Investment and research in solar energy sector is a must as renewable energy can help preserve the global ecological balance," he said. He appealed to the overseas Indian diaspora to look at investments in generating capacities and R&D and added that the sector offers good potential for profits.

Praising the efforts of government of Rajasthan on renewable energy, Abdullah said Rajasthan has huge potential for solar energy. Solar energy is already playing a vital role in Ladakh in street lighting, illustrating the solar energy potential of the deserts.

Vayalar Ravi, Union minister for overseas Indian affairs, said energy is the real force behind any development. He highlighted the advantages of solar energy especially in satisfying the basic requirements of rural India, generating employment opportunities and preventing migration to the cities.

Deepak Puri, co-chairman of CII national committee on renewable energy, and & chairman, Moser Baer India, pointed out that 60% of rural households in India do not have access to electricity he urged for innovative models such as pay-per-use model and community charging to make solar energy popular and available to all.