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Only Solar can meet India’s aspirations for Clean Energy, Clean Environment, and Human Development

Only Solar can meet India’s aspirations for Clean Energy, Clean Environment, and Human Development

Only Solar can meet India’s aspirations for Clean Energy, Clean Environment, and Human Development

The growth of solar deployment in India has already overtaken new installations of wind, hydro, nuclear and new thermal plants and cost of solar generation has become competitive with other sources of energy. Unlike the Indian wind sector that has enjoyed many years of FiT (Feed-in-Tariff) policies; the Indian solar industry had to reinvent itself in the era of reverse bidding policies by the government. Over the last six months, the solar industry has become competitive to thermal PPA prices primarily due to the non-restrictions in content and additional tax benefits in excise on components. Moreover, cost efficiencies achieved in utility scale solar energy plants are trickling down to the solar mini-grids thereby creating huge opportunities for powering villages, providing electricity through solar pumps and creating rural economic development.

In India, as the grid operators get worried about the growth of renewables due to its infirm nature, solar energy offers a more predictable, and, sustainable energy generation estimate as compared to the wind plants (See Fig: 1). Currently, wind power accounts for nearly 8.5% of India’s total installed power generation capacity and has

generated over 28,000 million kWh (MU) in the fiscal year 2014-15 (2.6% of total electricity generation) (1). 70% of the wind generation occurred during the 5 months from May to Sept, thereby requiring the grid operators to buy expensive short term power for the remaining 7 months. Also, wind power is primarily generated at night time when the demand for power on the grid is the lowest. Having an efficient and smart grid network will make sure that the generated infirm power is diverted to parts of the country that require it. Adding storage to this smart grid network will become a pre-requisite as we make renewables as one of the mainstream energy sources.

 India is one of the fastest growing energy economies in the world and the current energy mix (Fig:2) with a heavy dependence on fossil fuels is not going to help India meet its climate change goals. If India has to follow through with its commitment as per Intended Nationally Determined Contribution (INDC) for being 30% renewable by 2030, continuously improving solar and battery technologies operating at utility and distributed scale will be required.

The fall in solar costs coupled with reverse bidding Govt. policies has resulted in a 75% drop in solar tariffs from Rs. 17/kWh in 2010 till Rs. 4.34/kWh in 2016. Current solar tariffs are more competitive than the prices charged by the new thermal plants in the country (2) and this was possible because developers had the flexibility to choose technology from anywhere in the world.  The promise, however, is the trickle-down value of cheaper solar power to the millions of Indians who are living with no access to electricity. As per Fig 3, there are more than 200 million households without access to electricity and affordable 24/7 electricity can only be provided through mini-grid or community solar initiatives. 

In light of the above changing market conditions, the conclusion by WTO (3) (refer) to not allowing for domestic content requirement (allocating projects based on domestic cells and modules) is a welcome move for the industry. This move will allow developers to achieve the lowest LCOE (Levelized cost of energy) by importing the required technology. Though “Make in India” is a good platform for encouraging manufacturing in India, the current Indian manufacturing ecosystem is not equipped to adapt to the changing technologies in the solar landscape. The research cell efficiency chart (Fig. 4) from NREL (4)

shows the wide-ranging R&D currently being undertaken at various locations around the world.  If solar material manufacturing is a priority, Indian Govt has to encourage the best researchers from across the world to work on cutting edge research at Indian R&D institutions.  It is important that Indian manufacturing evolves continuously along with new solar developments. A haphazard strategy to just focus Indian manufacturing of solar modules will only end up with obsolete capacities and irredeemable bank loans. Instead, policymakers should be focusing on the deployment of utility and distributed solar without bureaucratic interference at the local state distribution and transmission bodies.