India’s National Solar Mission Promotes Rapid Solar Growth

At the recent Renewable Energy India 2011 Expo (REIE) held from August 10-12, India’s Jawaharlal Nehru National Solar Mission (NSM) was a hot topic. The established three-phase plan outlines targets to install 1-2 GW by 2013, 4-10 GW from 2013-2017, and 20 GW by 2022. But the EAI (Energy Alternatives India), a renewable energy consulting firm, predicts a much higher 75 GW by 2022.

By June 2011, 200 MW of grid connected photovoltaic (PV) and 500 MW of concentrated solar power (CSP) plants had been allocated for development under NSM, with an additional 300 MW of PV expected to be allocated soon.

NSM has provisioned $335 million to invest in solar over the next two years. With enhanced funding, policy support and state schemes, the Indian solar market can grow fast: “We are talking about an Indian market of 6-7 GW in next 4-5 years,” said James Abraham, MD & CEO of Sunborne Energy Services based in Gurgaon, India. 

Under NSM, PV and CSP share a 50/50 stake in total solar power production. There are presently very few CSP installations in India, but several 500-MW CSP plants are in the process of getting financing with support from NSM. 

Transmission infrastructure for grid connected solar power is a key agenda item for the Ministry of New and Renewable Energy. Secretary of the ministry, Mr. Gupta, said at REIE that the national Clean Energy Fund holds about $667 million annually for transmission infrastructure. “We seek this money for innovative solar projects, research and development projects and demonstration projects,” said Gupta. 

International financing and technology transfer is seen as key to scale up solar power generation in the second phase (especially for off-grid installations). For these projects, incentives are provided primarily as capital subsidies – 30 percent for non-priority regions, 90 percent for priority regions and accelerated depreciation, and five percent for soft loans in some cases. Incentives depend on whether the scheme is offered by state or center and vary from $0.27 to $0.40 per kWh for grid-connected power, depending on the size of the plant.

Some states such as Gujarat, Rajasthan and Karnataka, have encouraged investment by announcing renewable energy policies and schemes. This seems to have impacted their visibility in the renewable energy space. 

Andrea Manzini of CPL Energy was in India to prospect opportunities. “There is a lot of potential in solar. We are looking at solar and other renewable energy to find out the best way to invest in Gujarat, Rajasthan, Madhya Pradesh and Karnataka. We might [invest] 50/50 in solar and another renewable using a joint venture,” said Manzini. “We have done a lot of work in the European solar market. We are trying to do same thing in India. It’s a good time to start.”

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