Key support has dropped out of the Paris climate deal and the thrust is now on this large subcontinent to journey through to save the dependents. “Although India’s vision is lofty, its goals are comprehensive” – Narendra Modi.
With tremendous potential to achieve its goals, the Ministry of New and Renewable Energy (MNRE) has attracted global attention with its intention to scale up clean power generation capacity to 175 gigawatts (GW) by 2022. Of this, solar energy alone will be 100 GW. With approximately 300 days of sunshine every year, India is one of the countries that has the best conditions to harness solar energy in the world. A report by the Ministry of Power shows projections for FY 2016-17 – although falling short of its targeted 12,000 MW, the solar sector has had an impressive compound annual growth rate of 59% in the last four fiscal years.
The rapid expansion of solar power can drastically improve the quality of life for millions of Indians. To fulfill the agenda within the stipulated time, production of solar power should ideally increase by 15GW annually, for the remaining six years. This has the potential to create umpteen jobs in the industry and reinforce progress in all areas of development, helping the country fulfil its dream of becoming one of the largest harnessers of solar energy.
The growing momentum of activity in the renewable energy sector will get a further fillip if India addresses some of the key challenges.
The first challenge is on funding mechanisms. Bloomberg New Energy Finance (BNEF) estimated that India would require $100 billion dollar in financing to realize its solar vision. In addition to the existing resources, the ministry will be able to help realize this through support from domestic and foreign private investors. Funding from reputed bodies like World Bank and KfW Bank are a welcome indication of the interest the Indian solar industry holds for foreign investors. Two things are requisite to attract funding – clear and transparent plan of how the funds will be used and structured programmes to deploy these funds. Agencies like IREDA and SECI are a step in the right direction towards deploying these funds but the fund utilization plan and its goals need more clarity and transparency.
Second issue is related to legislative frameworks. To provide power to the whole country, private funding and public-private partnerships are paramount, and the key to this lies in appealing incentives and policies. Best explained as a two-way road, funding from non-government entities usually calls on support from the government in various ways which in turn encourage investment. Regulation by the central government is a must to ensure that funds are first directed to states with acute power shortage and poor grid infrastructure, and those states seeing rapid industrialization. In the absence of such regulation, select states with easy access to large funding agencies will be the only ones to benefit.
All these said, the ultimate success of the solar industry depends on a couple of other key factors like the need to promote mass awareness, ramp up local manufacturing capabilities in the solar industry, and investment in the new and emerging areas of power generation. Another hurdle to be overcome is in terms of land acquisition issues faced by project developers that can be resolved to a certain extent if land banks could be created, under the aegis of the land and revenue department of the states, and enabled through information technology. Access to litigation-free land banks with requisite infrastructure will become increasingly difficult with the ramp-up of solar installations. A well-maintained digital database of available land banks will develop considerable confidence in investors and project developers alike. Furthermore, IT enabled services from land and revenue departments for swift approvals and single-window clearance should help cut down the current lengthy timelines for due-diligence and statutory clearances.
There is a need to promote mass awareness. Renewable energy is sustainable, promotes a green environment and is a more realistic option for the future. Among the different forms of renewable energies, solar energy is the most reliable, cost effective, efficient, and is low on maintenance. Right information and education should be imparted to the public, so that they can voluntarily transition into using it.
India must also ramp up the manufacturing capabilities in the solar industry. According to a KMPG report on solar manufacturing in India, it is recognized as an industry with ‘strategic importance’. As per the National Solar Mission targets, indigenous manufacturing capacity to the tune of 4-5 GW can be achieved by the year 2020. Local manufacturing with benchmark quality and competitive pricing can enable faster ramp up of installations and de-risk supply uncertainties from other markets.
Another key area of intervention is technology. Bio-solar cells, floating panels, floating solar farms, along with novel methods of converting solar energy into electricity, and energy harvesting through various methods are some technology probes into renewable energy. Efficient and cost-effective energy storage technologies will further enhance the reliability of renewable energy during zero-generation hours of the day.
If all these systems work together harmoniously, it will support the implementation of renewable energy strategies, policies and programs that will assist in successfully achieving the ambitious targets set forth by the national solar mission.
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