"Building Solar India": Phase I Guidelines

Ramping up India’s Solar Mission at the Asia Clean Energy Forum this week, Minister Dr. Farooq Abdullah urged the Asian Development Bank and others to increase investment in solar energy in India.  India’s Ministry of New and Renewable Energy released a set of Guidelines for Phase I of the National Solar Mission entitled “Building Solar India”.  Deploying solar energy is central to India’s U.N. target of reducing energy intensity while maintaining robust economic growth.

The immediate purpose of the Phase I Mission Guidelines is to effectively support solar technology penetration for both centralized and decentralized energy by 2013.  Using various incentives, the Mission guidelines aim to develop a solar sector that is “demand-driven, market-based and user-benefit oriented,” while alleviating rural energy poverty, replacing dirty and subsidized imported fuels like kerosene and diesel, lowering the number of power cuts from intermittency problems associated with traditional photovoltaic cells, and reducing transmission losses that hinder the movement of electricity over long distances. 

Phase 1 of the Mission (2010-2013) will strengthen India’s solar capacity through three components:

  1. 200 MW of off-grid and decentralized solar projects to supply power to remote and rural areas through capital subsidies and low interest loans. Industrial/commercial consumers can use these policies to help replace unhealthy diesel generators.  State and local governments, NGOs, and individuals would also have a cleaner source of energy to supply off-grid and “mini-grid” power for irrigation and drinking water pumps, cell phone towers, and rural electrification.
  2. 100 MW of rooftop and other small solar power plants that feed into the grid through “feed-in tariff” price supports would create incentives for electric utilities to purchase solar instead of dirtier sources of energy.
  3. 1000 MW of large-scale solar power plants will be “migrated” onto the grid though feed-in tariffs and Power Purchase Agreements (PPAs) backed by the Ministry, which will subsidize the cost to utilities by bundling solar power with conventionally produced electricity.  Innovative companies, like mobile phone giant Reliance Industries are using this opportunity to invest in solar by building a 5 MW solar farm in western India. 

Since their announcement just last week, the Solar Guidelines have spurred increased investment in solar energy in India by both Indian and American companies.  Today, Moser Baer India announced its plans to invest $125 million in manufacturing photovoltaic cells this fiscal year.  American Capital Energy and MSM Energy are planning a 100 MW solar energy joint venture focused on photovoltaic solar engineering, procurement, and construction in India and Silicon Valley’s Applied Materials is driving solar research in India with IIT-Mumbai.  Meanwhile, India’s first 3 MW solar plant with 13,500 solar panels was unveiled in Karnataka, home to India’s vibrant high-tech industry.

For now, the objectives are admittedly modest, but this phase of the Mission will bring light and power to hundreds of thousands of Indians, improve indoor air quality, and set the stage for a massive push during the next two phases, as illustrated in this Ministry chart:

Application Segment

Target for Phase I


Target for Phase 2


Target for Phase 3


Solar collectors

7 million sq meters

15 million sq meters

20 million sq meters

Off grid solar applications

200 MW

1,000 MW

2,000 MW

Utility grid power including roof top

1,000-2,000 MW

4,000-10,000 MW


In the long run, industry experts predict that the solar sector has tremendous opportunity for success in India, driving the next economic boom, just as the chip manufacturing and telecom industries have in the past.  Successful implementation of India’s Solar Mission is also an opportunity for increased US-India cooperation that holds the promise to unleash clean energy innovation and deployment, protect human health, and fight global climate change.

(Co-authored by Almira Moronne, NRDC Intern)

About the Authors

Anjali Jaiswal

Senior Attorney and Director, India Initiative

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