For energy-starved India, solar has huge potential

It is important to place solar energy in the overall context of current energy basket of India — India desperately needs to tap renewable sources of energy given that 64.6 per cent of her power generation comes from fossil fuels including 53.3 per cent from coal and 10.5 per cent from gas, which, even high school students know are not going to last forever.

India has a huge advantage in terms of geography. It is uniquely placed to tap sunlight to meet part of her galloping energy requirements. Solar power fits in neatly with the requirements of today’s India — it is free and forever, it is clean and green, it is available everywhere, and almost everyday of the year. It lends itself to a range of solutions, from a few watts as in a solar lantern or solar home lighting system to a few kilowatts as in a rooftop solar power system to mega-watt-scale grid-connected solar power plants.
The fact is that more than 1,00,000 out of a total of 6,00,000 villages in India are still not electrified officially and almost 40 per cent of India’s 1.16 billion people do not yet have access to a basic lifeline of electricity connection. India’s per capita consumption of electricity is one-fourth of the world’s average: the gap between demand and supply of power is 10.1 per cent, peaking to 12 per cent, without accounting for 40 per cent who are out of the radar.

We are far from meeting the government’s stated aim of ‘power for all’ and the target of providing just 1,000 units of electricity per household per annum. One of the key reasons behind this dismal record has been the insistence on setting up large power plants — mostly coal-fired — with a distribution infrastructure that either exhausts all power in the urban areas and fails to reach power to the rural areas or, worse, leaves out the rural and remote areas from basic connectivity in the first place.

Against this, solar photovoltaic power is a commercially established technology which transforms the life of the villagers from day one. A villager does not ask for megawatts or kilowatts of power, he simply needs a light in his home at night. This has been done across as many as one lakh homes by a leading solar company in the last 2 to 3 years in Uttar Pradesh. There are millions of villagers still in the dark who are not interested in the high profile debate; they just want a light at home!

The opportunity cost of lack of electricity is huge — just in Coimbatore city alone the loss to the textiles and engineering industry on account of power (and labour) shortage is reported to be  Rs 2,100 crore. Now, amplify that at the national level and across all industries and the cost of putting up solar power infrastructure will look small.

Germany, which has half the sunshine that India does (India receives an average of 4-7 kWh/m²/day), has emerged as the biggest ‘solar power’ in the world with more than 30 per cent market share while India’s share is less than 1 per cent. This is because of the foresighted policy regime in Germany whereby solar power is encouraged on individual rooftops and can be sold to the local utility at pre-determined rates.

First phase
In India, the newly-launched Jawaharlal Nehru National Solar Mission (JNNSM), has correctly set aside a part of the programme capacity for such rooftop and small scale solar power plants. The major push and volumes will come from MW-scale grid connected solar power plants, with a target of 1,000 MW in the first phase of the mission, by March 2013.

This brings us to the original lament of the critics about solar power being expensive. The first fact is that solar power is not as expensive compared to conventional power as is being projected. If all the direct and indirect subsidies given to the conventional power sector are added back and if a ‘carbon tax’ is imposed on the fossil fuel generated power — in line with the ‘polluter pays’ principle — plus if a 35 per cent portion is added to account for the T&D losses,  conventional power will not be as cheap as it looks.

Secondly, solar power, like any other new technology, is certain to see cost reductions with volumes and technological innovations and improvements. Already, the cost of solar modules has come down from $4/Watt peak in 2005-06 to around $2/Watt peak today. In the last 18 months, the costs have fallen by as much as 30 per cent, driven of course by global recession.

There is no doubt that costs will come down further as the volumes driven by government programmes such as the JNNSM roll out over the next few years. Indeed it is the stated aim of the JNNSM to achieve grid parity of solar power by 2022. Grid parity when achieved will be the inflexion point from where solar will take off on it own.

Due to the absence of a sizeable market in India, leading Indian solar PV manufacturers have been traditionally exporting their products to Europe and the US. Now that the Indian market is taking shape, they will be able to service the Indian customers. Given the large numbers involved — the JNNSM targets 20,000 MW of solar power by 2022 — it is likely that foreign manufacturers will establish bases in India. A whole new solar power ecosystem generating new jobs and entrepreneurship, propelled by technological innovations and technical R&D, and involving big corporates as well as SMEs, will develop in India.

The decisions we take today on how we produce, consume and distribute energy will profoundly influence our ability to eradicate poverty and respond effectively to climate change.

(The writer is CEO, Tata BP Solar)