India's Dr. Farooq Abdullah, Union Minister for New and Renewable Energy, has confirmed details of the national solar energy development policy in a statement to Parliament.

One of the eight key National Missions which comprise India’s National Action Plan on Climate Change, the so-called Solar Mission, launched under the brand name “Solar India” recommends a three phase implementation, leading to an installed capacity of some 20,000 MW in 2022.

The first phase will last until 2012-2013, Phase 2 will run from 2013-2017 and 2017-2022 as Phase 3. The first phase will focus on capturing low-hanging options in solar thermal; promoting off-grid systems to serve populations without access to commercial energy, and modest capacity additions of grid-based systems. In the second phase, the government says that capacity will be aggressively ramped up to create conditions for up-scaled and competitive solar energy penetration.

Targets include ramping up capacity of grid-connected solar power generation to 1000 MW by 2013, and an additional 3000 MW by 2017 through the mandatory use of renewable purchase obligations by utilities, backed with a preferential tariff. This total potential installed capacity could be more than doubled to 10 GW or more by 2017 based on enhanced and enabled international finance and technology transfer, the Ministry for New and Renewable Energy (MNES) says.

At the end of each plan - and mid-term during the first two phases - there will be an evaluation of progress and a review of capacity and targets for subsequent phases. Reviews will be based on emerging cost and technology trends, both domestic and global, with the aim of protecting the government from subsidy exposure in the event that cost reduction does not materialize or is more rapid than expected.

The ambitious 2022 target of 20 GW or more will be dependent on the first two phases, which if successful, could lead to grid-competitive solar power by the end of the programme, MNES adds. Grid parity with cheap coal-fired thermal power is anticipated by 2030, although the government warns that this cost trajectory will depend upon the scale of global deployment and technology development and transfer. Nonetheless, there are a number of off-grid solar applications particularly for meeting rural energy needs, which are already cost-effective and provide for rapid expansion.

Already faced with crippling electricity shortages, prices of electricity traded internally have touched Rs 7/kWh (US cent 15/kWh) for baseload and around Rs 8.50/kWh (US cent 18.5/kWh) during peak periods, the country is also increasing the use of diesel-based electricity, which costs as high as Rs 15/kWh (US cent 32.6/kWh).

“It is in this situation the solar imperative is both urgent and feasible to enable the country to meet long-term energy needs”, observed Abdullah.

Noting that “the next three to four years will be critical”, the Cabinet has approved 1100 MW of grid-connected solar power and 200 MW of off-grid installations using both solar thermal and photovoltaic technologies in the first phase of the Mission. In addition, the policy also focuses on developing a sustainable indigenous market.

Under the terms of the scheme, for the next three years the power trading company NTPC Vidyut Vyapar Nigam (NVVN), an arm of the National Thermal Power Company (NTPC) will purchase solar power generated by independent solar power producers. Production rates are to be fixed by the Central Regulatory Electricity Commission for a period yet to be specified. Meanwhile, the government says it will provide equivalent power from an unallocated portion of NTPC’s capacity to allow other utility groups to purchase a solar power equivalent, which they will be able to count against their renewable portfolio (RPO) obligations. The solar component of the RPO will be gradually increased while the tariff fixed for solar power purchase will decline over time, the government says.

The Mission also includes a major initiative for promoting rooftop solar PV applications, with a solar feed-in tariff to be announced by regulatory authorities which will be applicable for such installations. Local power distribution companies will also be involved in purchasing this power. An awareness campaign for solar thermal heating is also planned, with targets to achieve 15 million square meters of solar thermal collector area by 2017 and 20 million square meters by 2022. Indeed, the Mission is setting an ambitious target for ensuring that domestic and industrial applications below 80 °C are solarised, among other measures making solar heaters mandatory, through building byelaws and incorporation in the National Building Code.

In the off-grid sector, the Solar Mission has set a target of 1000 MW by 2017, but plans to provide solar lighting systems under the ongoing remote village electrification programme to cover about 10,000 villages and hamlets with a 90% subsidy provided. Some 20 million solar lighting systems are to deployed in rural areas by 2022 under the terms of the scheme as outlined.

A number of concentrating solar power (CSP) demonstration projects are also planned in Phase 1, including a 50-100 MW solar thermal plant with 4-6 hours’ storage which can double plant load factor up to 40%; a 100 MW parabolic trough-based concentrating solar thermal plant, and a 100-150 MW solar hybrid plant with coal, gas or biomass to address variability and space-constraints. A 20-50 MW solar plant with or without storage and based on central receiver technology with molten salt/steam as the working fluid as well as other emerging technologies, such as solar cooling, are also to be developed under the demonstration project programme.

In launching India’s National Action Plan on Climate Change on 30 June, 2008, Prime Minister Dr. Manmohan Singh stated: “Over a period of time, we must pioneer a graduated shift … to renewable sources of energy. In this strategy, the sun occupies centre-stage, as it should.”