Solar Energy: A Dynamic Growing Potential for India

For the past few weeks, along with our partner the Council on Energy, Environment and Water (CEEW), I met with key solar energy industry leaders in India. Following the recently released second batch of the first phase of the solar guidelines, discussion about India’s solar industry continues to boom. Government officials and private industry stakeholders overall are pleased with the progress under the solar mission, but recognize that much more needs to be done.  In particular, the financing aspects and the auctioning methods remain priority topics of discussion for the next phase of the mission.

What’s clear from our initial meetings is that active engagement by all stakeholders is critical for India to meet its National Solar Mission’s target of 20,000 MW of grid. Our initial meetings confirmed cautious optimism for the solar mission and that there are divergent views on the state government plans, technology costs, and domestic content requirements. 

In the next few months, through on-the-ground-discussions and research analysis, NRDC and CEEW plan to conduct an independent assessment and analysis of India’s National Solar Mission. Our assessment will analyze the solar ecosystem in India and how it is developing.  Clearly, if fully implemented, India’s solar goals have a significant potential, domestically and internationally.  India maintains solar power potential to save 95 million tons of CO2 annually by 2022. India aims at both solar photovoltaic (PV) and solar thermal technologies through a variety of applications for lighting, space-heating, cooling, water heating, and cooking.

The Indian government is providing funding incentives to solar power operators, financial institutions, state and local governments, utilities, NGOs, and entrepreneurs.  Central government agencies have been working together to promote the solar mission.  The Ministry of New and Renewable Energy is responsible for the implementation of the Mission. The Indian Renewable Energy Development Agency (IREDA) attains renewable-energy-financing and provides incentives to state-utilities for each unit of power that they purchase from solar power plants.  The Government of India also supports and increases demand for solar energy through manufacturing incentives, off-grid applications for rural communities, and feed- in tariffs.  The central government has initiated a Payment Guarantee Scheme that mitigates the risk of nonpayment to solar developers. This has provided for nearly all Phase 1 projects to achieve financial closure.

Currently, India’s largest industries, Reliance, Tata and Birla are investing in major solar projects. The Oil and Natural Gas Commission, NTPC and Bharat Heavy Electricals, major government entities, are also implementing large scale solar projects. U.S. government and industry are invested in India’s solar energy efforts. The U.S. Export-Import Bank, an independent agency of the federal government, is providing $500 million to fund new solar projects in India

Solar energy has the power to mitigate climate change and transform India’s economy. While evident to government, industry, and civil society, this potential power is still in its early stages of development. The successful achievement of India’s Solar Mission depends on continued expansion and commitment towards current robust development of solar research. 

(Co-Authored by Neha Mathew, NRDC Academic Intern)

About the Authors

Anjali Jaiswal

Senior Attorney and Director, India Initiative

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