This article excerpt is taken from the forthcoming issue of Renewable Energy Focus magazine (March/April issue). To register to receive a digital copy click here.
India is one of the sun’s most favoured nations, blessed with about 5000 TWh of solar insoluation every year. India should tap this vast resource to satisfy its growing energy demand – and time is of the essence. Even if a tenth of this potential was utilised, it could mark the end of India’s power problems – using the country’s deserts and farm land.
India could lead the world by embracing the power of the sun, if smart business models and favourable policies are developed and implemented nationwide as quickly as possible.
Despite the worldwide recession, the solar photovoltaic (PV) industry has demonstrated unprecedented growth over the past years, with increased demand for solar power attracting more and more players into the market. The price of solar panels fell 47% in 2011, according to Bloomberg. This has made the business case for solar more compelling because solar PV has, in some parts of the world, already reached grid parity, and it will soon be below the US$1/W cost target for most of the world sometime this year. This is making solar technology more competitive with traditional energy sources.
The Indian Government should therefore embrace favourable tax structures and consider providing financial resources to fund projects such as community solar farms as part of their energy development programmes. “India can be a great power, ushering in a game-changing third industrial revolution by utilising its renewable energy resources and collaborating with power producers and suppliers,” says American Economist and Author Jeremy Rifkin. India could become the Saudi Arabia of solar energy.
Solar energy is a win-win for India and the environment, and India should make solar energy a mainstream component of its energy diversification. There is really no better economical choice for India.
India needs solar energy now
India has tremendous energy needs and an increasing difficulty in meeting those requirements through traditional means of power generation. Electricity consumption in India has been increasing at one of the fastest rates in the world due to population growth and economic development. The Indian economy faces increasing challenges because energy supply is struggling to keep pace with demand, and there are energy shortages of 10-13% daily almost everywhere in the country. Because India has so many black-outs, many factories and households use emergency diesel generators as back-ups. This back-up power could be supplied by solar energy.
Solar has the potential to transform the Indian economy in the same way as the information technology (IT) and auto industry transformed the Indian economy in the 1990s. India is in a unique position to introduce clean energy solutions on an enormous scale to provide affordable energy for everyone – especially the poor.
India should take full advantage of this golden opportunity because solar energy has particular relevance in remote and rural areas, where around 289 million people live without access to electricity. Solar energy is the most cost-effective option for India to reduce energy poverty without having to extend national grid services to provide power for individual homes and buildings.
Renewable energy is an attractive investment because it will provide long-term economic growth for the country. A favourable renewable energy policy could create millions of jobs and an economic stimulus of at least US$1 trillion, and perhaps much more if all indirect economic (ripple) effects are included. "India is the Saudi Arabia of renewable energy sources and if properly utilised, India can realise its place in the world as a great power," Rifkin says.
If houses in villages and cities produce energy from solar power and then sell it to distribution companies, this could, for example, give a level-playing field to rural areas in terms of industrialisation.
The Government needs to play a decisive role, however, by providing feed-in-tariffs, tax credits and other support mechanisms in order to realise the significant solar potential in India. It would be a serious miscalculation, if India missed out on this opportunity.
How solar energy can work for India