Farooq Abdullah, India’s Union minister for new and renewable energy, is a busy man these days. Over the past few months, as the Copenhagen climate summit neared, he has been speaking at seminar after seminar on renewable energy which, most of the time, have been on solar energy. He has also been inaugurating projects, from the launch of a new solar lantern to the commissioning of a solar steam system at a temple kitchen to cook food for 20,000 pilgrims each day. All over India, solar power has found its day in the sun.
On November 23, Abdullah was again in action in Parliament unveiling the Jawaharlal Nehru National Solar Mission. When Prime Minister Manmohan Singh launched India’s National Action Plan on Climate Change on June 30, 2008, he had highlighted the contribution of solar power. “In this strategy, the sun occupies center stage, as it should, being literally the original source of all energy,” he said. The action plan envisaged eight missions — for Solar Energy, Enhanced Energy Efficiency, Sustainable Habitat, Water, Sustaining the Himalayan Ecosystem, Green India, Sustainable Agriculture and Strategic Knowledge for Climate Change. Appropriately, the Solar Mission has been the first one off the ground.
Abdullah said the mission “has a twin objective — to contribute to India’s long-term energy security as well as its ecological security. We are living in a world of rapidly depleting fossil fuel resources, and access to conventional energy resources such as oil, gas and coal is becoming increasingly constrained. The rapid development and deployment of renewable energy is imperative in this context and, in view of high solar radiation over the country, solar energy provides a long-term sustainable solution.”
The Mission has been launched under the name Solar India. (Ever since the success of the Ministry of Tourism campaign under the Incredible India banner, branding is de rigueur for government projects.) “Solar is currently high on absolute costs compared to other sources of power such as coal,” says the Mission document. “The objective of the Solar Mission is to create conditions, through rapid scale-up of capacity and technological innovation, to drive down costs towards grid parity. The Mission anticipates achieving grid parity by 2022 and parity with coal-based thermal power by 2030, but recognizes that this cost trajectory will depend upon the scale of global deployment and technology development and transfer.” (Grid parity is the point at which the cost of one power source becomes equal to or lower than grid power.)
The Mission also notes the advantages of solar power. First, India has great potential. “About 5,000 trillion kWh per year of energy is [used] over India’s land area.” Second, “solar energy is environmentally friendly as it has zero emissions while generating electricity or heat.” Third, from an energy security perspective, solar is the most secure. “The objective of the National Solar Mission is to establish India as a global leader in solar energy,” says the document. It then goes on to set ambitious targets — 1,000 MW by 2013 going up to 20,000 MW by 2022. The policy includes an array of fiscal incentives, the formation of a National Centre of Excellence, subsidies on the sale of power, creation of a single-window clearance mechanism, zero import duty on equipment and components, and the setting up of two to three large solar manufacturing technology parks.
“The Indian solar energy industry can easily rise to the challenge of bringing solar energy to the forefront to help India address the twin challenges of energy security and combating global warming and climate change,” said Chandrajit Banerjee, director general of the Confederation of Indian Industry (CII) in a statement welcoming the Mission. “India is particularly well positioned to reap the advantages of solar power, which is clean, free, forever and everywhere.”
Most people agree on the potential, but they are uncertain whether the Mission will meet the projections. “I hope it will meet its targets,” says Vasant Natarajan, a professor in the department of physics at the Indian Institute of Science (IISc) Bangalore. “It is an imperative in this day of climate change, and the consequences of not pursuing this goal vigorously would be catastrophic.” Sanjeev Ghotge, senior fellow and head of the Center for Policy and Sustainability Research at the Pune-based World Institute of Sustainable Energy (WISE), is also optimistic. “It is possible (that we will meet the targets) provided we work hard at it and if the international climate is conducive to helping us do it. It is conditional on both these factors.”
Harish Hande, managing director of SELCO Solar Light, which is one of the acknowledged entrepreneurial successes in this area, is skeptical. “I don’t think that it (the National Solar Mission) is wishful thinking but I do feel that it is too ambitious,” he says. “The demarcation between the on-grid and the off-grid should have been clear. A lot of the emphasis of the 20,000 MW is on centralized solar. For this, a lot of related infrastructure needs to be put in place. Land ownership will also be an issue. In a country like India where 70% of the population is in rural areas, the centralized model may not work effectively. Besides, 20,000 MW in 10 years is too ambitious. It is not just about technology. Technology is only one part of the chain and it does exist already. It’s only a matter of improving it. What we need now is the appropriate supply chain, doorstep service and a variety of financial products.”
Some success stories have already emerged. Hande and the Bangalore-based SELCO have several such projects. Silk farmers are now using solar lamps instead of kerosene lanterns. Apart from other advantages, this reduces the mortality rate of silkworms. SELCO has also launched headlamps for midwives. It has worked out several innovative financing models. Hande has support from the Rockefeller Foundation.
Also in Bangalore is Crown Solar Power Fencing Systems, which makes solar power fencing, solar lighting systems and security devices. Tata BP Solar, in which BP holds 51% and the Tatas the remaining equity, has a much wider range on offer. This includes lanterns, home lighting, water pumps, water heaters, road studs, street lights and solutions for several sectors such as banking (the Sunbank solar power pack, a cost-effective solution for rural banks) and telecom (the Sanchar solar-powered system). These sectors’ rural forays had hit the wall of perennial power shortage. Solar has been one solution.
TERI (The Energy and Resources Institute) has on offer a milk-churning device that runs on solar energy, solar-powered television sets, fans and a lot more. TERI also has a project in West Bengal to promote women as solar power entrepreneurs. Mukesh Ambani’s Reliance Industries has a solar group which, among other products, has a water purifier in its range. Photon Energy Systems has launched solar desalination systems. There will soon be a solar version of every appliance that runs on power. “The small-scale appliance market provides us a unique opportunity,” says Natarajan of IISc. “Providing a few hours of lighting after sunset in a village house can make a big difference in the education of the children in the household. This can be done by a solar-powered battery charger that, in turn, powers an LED lamp.”
Others are considering the grid — that is, generating power for supply to homes and industry. The public sector National Thermal Power Corporation is going into solar power in a big way. Bharat Heavy Electricals has commissioned two grid-interactive solar power plants of 100 KW each in Lakshadweep islands. The Oil and Natural Gas Corporation is getting into the business as well.
While the public sector is thinking about large scale projects and the private sector about small projects and appliances, there are some crossovers. On December 1, Azure Solar became the first Indian company to sell power commercially in India. Its 2 MW plant may seem small, and the 1 MW it is supplying to the Punjab State Electricity Board isn’t going to light up many households. But 1,000 Azures can make a difference. In West Bengal, Titan Energy has just completed the construction of a 1 MW unit for the West Bengal Green Energy Development Corporation.
State governments also are getting into the act. Andhra Pradesh has set aside 6,000 acres in Anantapur district for allotment to companies setting up solar power projects. Three companies — the U.S.-based SunBorne and AES Solar, and the Hyderabad-based Lanco Solar — have been issued offer letters. The three companies will together invest around $600 million.
In Gujarat, the government is talking to the Clinton Foundation, which has launched the Clinton Climate Initiative (CCI) to create and advance solutions to the core issues driving climate change. This is a massive project, one of four solar parks planned across the world. “In partnership with TERI and other technical expert partners, the CCI is assisting the government of Gujarat to prepare feasibility studies for the creation of one or more solar parks in the state,” says Olivia Ross, PR director of CCI. “A solar park is an area where solar power is produced on a significant scale. Each solar park will include more than 3,000 MW of solar generation capacity.” The 3,000 MW is for starters. The plan is actually for 5,000 MW at a cost of around $15 billion. The Gujarat project is likely to be the first to come up and will become the world’s largest solar project. “Solar parks for large-scale generation are needed if we want to wean ourselves away from coal-based power generation,” says Natarajan of IISc.
In Maharashtra, summer capital Nagpur is being developed as a solar city. This is a central government initiative: 60 cities all over the country are being designated solar cities. Nagpur is the first. The initial target is to reduce the use of conventional energy by 10%. For Nagpur, the target is by 2012.
Also in Maharashtra, though this is a private effort backed (and partly financed) by the government, is the solar cooker at the temple complex at Shirdi, set up at a cost of $250,000. This feeds 20,000 devotees who visit the Sri Sai Baba Sansthan every day. The plant was inaugurated by Minister Abdullah in July this year. It will save $60,000 a year on LPG costs. Shirdi is not the first, but it is the world’s largest. Several other religious sites in India — including Mount Abu and Tirupati, among others — have installed solar cookers for preparing meals for pilgrims.
Some problems need to be tackled first, however. One issue has to do with land, according to Ghotge of WISE. Though land acquisition from farmers is a touchy subject, if it is handled correctly, Ghotge believes it may not pose a major hurdle.
Another challenge is that some solar thermal technologies require water. In a state such as Rajasthan, water is available from the Rajasthan canal, but according to Ghotge, “you have to ensure that priority is given to solar thermal projects along the canal areas and not to solar PV generation because PV generation is not dependent on the availability of water. These kinds of policies need to be understood and well thought out in order to be successful.”
The question of policy support from the government for high-cost technologies in their initial stages also looms large. Moreover, India will face challenges in absorbing solar power into the nation’s power grid and pay for it. “The cost of any technology comes down the moment you get into mass production,” Ghotge notes. “It is a chicken-and-egg problem. The companies with cutting-edge technology typically are not very large and don’t have deep pockets. They would not like to part with their technologies. They would like to earn money from it, plough it back and grow. We need companies that are solid and not only those that are there to sell out and make money.”
Private and Public Efforts
This may be the reason that the private sector has only been nibbling at the edges of this sector and leaving the hard work to the government and government companies. Solar power needs all hands on deck. Is the private sector doing enough? “The private sector has not taken enough initiative and has not put in enough resources and effort for the Indian market,” says Hande of SELCO. “This is because of the long gestation period here. What it has done is put up manufacturing plants (of panels) to cater to the needs of the West — for markets like Germany, Italy and California, which offer subsidies. They (the private players) should have taken the initiative to nurture the India market also instead of waiting for the government to offer incentives. I doubt if this National Solar Mission will make new players take an active stance. They will still wait for everything else to be done by the government. And that is where they are going wrong. They need to show the government how things can be done.”
Natarajan disagrees. “I don’t think the private sector has stayed out of solar,” he says. “Almost all the solar water heater manufacturers, for example, are private companies. Similarly, several photovoltaic manufacturers are private. The announcement of a Mission can only enthuse them more. If there is money to be made, the private sector will come. And there will be money to be made if the government provides the right subsidies. The long-term environmental cost of a coal-based power plant is not factored into the cost per unit of electricity you pay today. This is where the government can step in: Make solar power generation cost competitive by providing a suitable subsidy, or introduce a carbon tax on polluting ways of generating power.”
Can India become a solar superpower? It has a lot going for it. On average, the country has 300-320 sunny days a year. The average solar insolation in a city like Mumbai is about twice that in New York, Berlin or Tokyo. (Insolation is a measure of solar radiation energy received on a given surface area in a given time.) On the other hand, a huge shortage of power exists. According to the Central Electricity Authority, there is a 10% to 12% power shortage in the country. Power cuts in urban areas (referred to as “load-shedding”) go on for hours. They are longer in rural areas, where large parts aren’t even electrified. However, targets on capacity addition have often fallen by the wayside.
“India can certainly become a solar superpower,” says Natarajan of IISc. “We have the necessary scientific expertise and talent; we just need the government to mold this talent by taking the right policy decisions. Announcing a solar mission is easy. Converting that into concrete action in terms of the right policies and investment is the more difficult part. But I think the mission is the right first step.” Adds Ghotge of WISE: “It is difficult to say if India can become the biggest player. One does know what Africa will do in this space. They, too, have a lot of potential.”
But Hande of SELCO has no worries. “India has the potential to become the biggest player,” he says. “More importantly, India has the potential to be the most sustainable player. Unlike countries like Germany, Italy, Spain and the U.S. (California), which are heavily dependent on tax incentives and subsidies, in India we are moving ahead without these. India has the potential to create a much better sustainable infrastructure.”
Before the National Action Plan on Climate Change was announced last year, wind power seemed to be winning the race for renewable energy. The government had given the industry several incentives. Companies such as Suzlon were even beefing up their domestic operations with substantial acquisitions abroad. Today, the picture is different. “Solar energy is most certainly a better bet,” says Ghotge. “Our resources are very, very large. We need to build on our technologies.” Adds Natarajan: “It is much safer and surer in the Indian context than, say, wind because India is blessed with plenty of sunshine the year round and at all places.” In other words, the sun is now rising.