Blessed with 300 sunny days, India is capable of producing 5,000 trillion kilowatts of clean energy that is not only affordable but also scalable. This energy can drastically reduce our energy deficit and minimise carbon footprints
The Jawaharlal Nehru National Solar Mission was established in 2010 with the objective of promoting ecologically sustainable growth. A target of 22,000 MW was to be installed by 2022. The first phase, completed in December 2012, aimed at setting up a nurturing environment for solar technology to penetrate the country both at the centralised and decentralised level. This included promoting off-grid systems to serve populations without access to commercial energy and modest capacity addition in grid-based systems. The first phase of JNNSM has established the required foundation by ensuring that India now generates 979 MW of solar power from less than 20 MW in a span of two years. Another 820 MW will be generated by mid 2013. Interestingly, 700 MW of this comes from a non-JNNSM state, Gujarat. The Gujarat Solar Policy was announced almost at the same time as the JNNSM, but it was quicker in allocating projects and signing power purchase agreements. This was made possible by not following the reverse-bidding process for project allotment and instead opting for a first-come-first-basis model. In addition the projects under the Gujarat policy were accorded higher tariff, thereby making it more lucrative.
The first phase has seen a welcome trend of the price of solar energy come crashing down. In November 2010, when the first tender for solar photovoltaic power was opened, the lowest tariff was Rs10.85 per kilowatt hour. A year later, in December 2011, when new bids were opened, the tariff was down to Rs7.49 per kWh. What makes solar energy attractive is that it is now close to grid parity, with energy utilities buying power at Rs4-5 per kWh. The year 2013 marks the beginning of Phase II of the National Solar Mission with the Union Ministry of New and Renewable Energy setting a target of 9,000 MW of solar power by 2017, of which 5,400 MW will be paid for by cash-strapped States. But the first phase has provided certain challenges that need to be attended to for a smooth second phase run.
For instance, the procedure to avail duty exemption is lengthy, involving the multiple bodies — State and the Ministry concerned — resulting in time delays for the projects. In addition, the US and the Chinese imports of equipment can be brought into the country tax-free, whereas Indian manufacturers have to pay duties on raw materials to make the same products. Nearly 5-10 acres land is required per MW and its acquisition has been another area of concern with JNNSM leaving the formalities to State -level agencies thereby adding another bureaucratic hurdle and a potential delaying factor for the projects.
The first phase has also thrown up some observations on the technical side. like any upcoming sector, established and reputed manufacturers of modules and inverters are finding traction with bankers. The vendor competency is hinging on their reputation and ability to offer performance guarantees for lifetime of the project and this is fast becoming the norm. As opposed to this the technology and quality of Indian modules and inverters still requires to be proven and the second phase is a good opportunity. But for this the Government needs to provide impetus for manufacturing in this area, including for raw material such as silicon wafers. The industry so far has relied on international markets to source the raw material which has been highly fluctuating in the past, leading to imbalance in demand supply equation, fluctuating prices and availability of raw material. Currently, the silicon production capacity is much higher than the demand and prices are at significantly low levels compared to the scenario a year back. In the past, some of the solar PV firms had entered into rate contracts with silicon wafer suppliers to ensure availability. With a sudden reduction in prices, the contracts now prove to be a loss-making proposition for these firms. This situation is compounded by non-availability of advanced thin film technology in India.
India, with 300 sunny days and solar insulation of 4-7 kWh/sq m per day, has an abundance of solar energy capable of producing 5,000 trillion kilowatts of clean energy that is not only affordable but also scalable. This energy can reduce our energy deficit without carbon emission. The JNNSM’s second phase, building on the success of the first, is a good opportunity to not only ensure clean power but also nurture and develop the nascent solar products and allied industry.