India is perfectly positioned at the North of Equator to receive 300 to 330 sunny days a year. This geographical position equips India to generate 5,000 trillion kilowatt-hours of solar energy, satisfying energy deficit in the country and leveraging industrial reform.
India’s current peak power demand is approximately about 167 GW. And calculations reveal that using just 0.50 percent of its land, India can generate 1,000 GW of solar energy. Plus, India has considerable space in desert areas that can be used for generating energy. Government has also understood that for a country with GDP growing at about 8 percent, going solar is not one of the many options but the only viable one to bridge the ‘gap’ between supply and demand.
To harness India’s solar potential, the central government and several state governments have taken several measures such as lining up large tenders, improving infrastructure, and creating demand for domestic manufacturers.
But to expedite adoption of solar, more needs to be done.
Solar energy growth has quadrupled in recent years with the help of Government backed policies and financial aids. In January 2016, India’s solar capacity stood at around 5 GW. However, it reached 20 GW in 2018. Keeping the impressive growth rate in mind, we can assume that India is likely to reach 100 GW power capacity by 2022.
Offering 100 percent income tax holiday for 10 consecutive years, accelerated depreciation at 80 percent on solar assets has helped Indian solar structure to form. Tax-free grants, additional one-time allowance, subsidies and rebates on capital expenditures have also stoked the entrepreneurial spirit of India and brought investment. When we are talking about initiatives, we must factor in the policies that influenced the growth in this sector. Policies like- mandating solar installation in Government buildings, net metering, International Solar Alliance, viability gap funding, raising tax free solar bonds, offering long tenure loans, ‘Solar Park’ development have successfully created the environment for Indian solar industry to grow.
A Better Approach
Current Indian solar vision has divided into various segments to bring support in financing, industrial development, demand creation, and reaching competitiveness. In this crowd of choices and requirements, India is losing focus in domestic capacity enhancement, which is the only way to achieve solar self-reliance. If India is to go toe-to-toe with countries like China, US, Japan that currently dominate the global solar industry, a strong domestic solar capacity enhancement is required. Acting on-
- Offering flexible incentives, financing and tax exemptions to solar manufacturing industry in India
- Reducing the time table of implementing net metering facility. It will boost the solar implementation projects.
- Building a better demand for domestic solar modules
- Extending the existing RPOs to captive consumers
- Implementing and monitoring use of feed-in-tariff processes
- Insuring that Government buildings and utilities are using or installing solar solutions
- Increasing awareness of solar technologies
- Bringing quality guidelines and establishing module assessment labs (currently India has 5 MNRE accredited labs) to ensure energy sustainability
- Developing an easy certification process to establish high growth rate
Focusing on solar skill development can bring India the opportunity to harness solar potential by increasing domestic capacity and awareness.
To Reach the Opportunities:
Government support, raising energy demand, global acceptance towards solar energy, and increasing investor interest, are opportunities for solar sector to grow beyond expectations. And, financial support in guise of multi-billion dollar commitments, which India desperately needs is coming through mutual efforts of Government and private solar companies. With more than $37 billion investment commitments, it is true that the chances of Indian solar progress increase, but to make ‘100 GW energy generation capacity by 2022’ a reality, domestic capacity enhancement is crucial. Government has offered capital subsidies to manufacturing plants in Special Economic Zone (SEZs) and outside SEZs, and offered quotas to protect domestic manufacturers. However, recent developments (blanket safe guard that affects SEZ solar manufacturers) are threatening to halt the progress.
And there are still challenges like- delays in land acquisition, lack of uniform policy and implementation issues, lack of module quality standard, low investment in R&D, lack of consumer awareness and many more that needs to be addressed.
The shift towards solar sector can help India scale great heights, claiming a large portion in the global energy sector, but to reach these opportunities, the country needs to boost its efforts.