India still is not among the world's top 10 solar energy generators. But at the current pace of 20 percent annual growth, India could emerge as the fourth largest market for solar energy after Germany, Japan and China in the coming years. So far, around 1.4 million solar Photovoltaic (PV) systems, together amounting to about 110 MW peak solar photovoltaic module capacity, have been installed - largely for off-grid and agricultural pumping applications. The country has some of the best quality silica reserves in the states of Orissa and Andhra Pradesh. With over 50,000 villages in India without electricity, solar power has enormous potential to meet rural electricity needs, improving the lives of millions of Indians and meeting critical agricultural, educational and industrial needs.
It is perhaps the only country in the world with an independent Ministry for renewable energy, known as the Ministry of New and Renewable Energy [MNRE] (www.mnre.gov.in/).
To keep pace with the global rise in the PV industry, Government of India (GoI) has instituted solar industry programs on both the demand and the supply side. On the demand side, GoI announced a Feed-in-Tariff (FiT) providing financial support up to INR 12 per kWh for Solar PV projects promising a 10 year commitment with a cap of 50 MW (http://www.mnre.gov.in/pdf/guidelines_spg.pdf). Several state governments followed suit by announcing FiT incentives with caps ranging from 50MW to 500 MW, the most prominent among them being West Bengal, Gujarat, Haryana, Punjab and Tamil Nadu. The government of Gujarat (located in western India) recently announced a policy to target 500 MW in the state. The Feed-in-Tariff will be US$ 0.27/kWh for a period of 12 years. The maximum size per project is 5 MW to enable more customers. Developers will also have access to an 80% accelerated depreciation benefit under the Income Tax Act. The state has already received proposals worth 2,000 MW. In response to this policy, Astonfield Renewable Resources Limited signed a deal for 200 MW and is already in talks with global majors from Europe and USA for technology tie-ups. TATA-BP Solar (a joint venture between the TATA group and BP Solar) announced that it is setting up a 5 MW project. In addition, more than 2,500 MW worth of applications have been submitted to state governments of Rajasthan, West Bengal, Punjab, Haryana, Tamil Nadu and Karnataka.
On the supply side, during August 2008, GoI announced a semiconductor policy (www.mit.gov.in/download/guidforsips.pdf) with cabinet-approved incentives to attract foreign investment to the semiconductor sector, including manufacturers of semiconductors, displays and solar technologies. GoI will bear 20 percent of capital expenditures in the first 10 years if a unit is located within one of the Special Economic Zones (SEZs), including a major economic zone in Hyderabad called "Fab City". The minimum investment was set at INR 25 billion for semiconductor manufacturers and INR 10 billion for other micro- and nanotechnology organizations. The solar industry has been the chief beneficiary of these announcements under this incentive-based economic policy.
As a follow-up to its semiconductor policy (the Special Incentive Package Scheme, or SIPS), the government of India received 10 Solar PV proposals amounting to a total investment equating to US$ 225.7 billion.
In June 2008, Dr Manmohan Singh, the Honorable Prime Minister of India, announced The National Action Plan for Climate Change (NAPCC). Solar energy was the focus, with a target achievement of more than 1,000 MW. An abundance of solar energy will wer the country’s economy and transform the lives of its people. Success in this endeavour will change the face of India.
India is already a major contributor to the global technology market. According to a Frost & Sullivan report, the total market revenue for semiconductors in India during 2008 was estimated at $4.38 billion. The growth in the key user segments of telecommunications, IT and office automation (IT & OA), and consumer electronics, is anticipated to catapult semiconductor TM revenues to $5.49 billion in 2009. With recent government initiatives and industry actions, India can also be expected to join the leaders in the global photovoltaic market.
The prominent sectors offering maximum market potential over the coming years for the Solar PV market in India are:
- Decentralized distributed generation (DDG) for meeting rural electricity;
- Backup power for telecoms (base transceiver stations);
- Roof-based captive systems for individual industries, and
- Grid interactive solar PV power plants.
Physicists, hardware engineers, qualitative solar inverter manufacturers, turnkey system integrators and trainers on solar PV offer tremendous business potential.
In November 2008, IBC Solar, a turnkey service provider, launched its operations in India to address the utility-scale projects. DuPont Photovoltaic Solutions (SPVS) plans to establish a PV lab by 2010 at the DuPont Knowledge Center in Hyderabad to provide technical and research facility support in India. The IBM Thomas J Watson Research Center, the headquarters for IBM Research, has expressed its desire to participate in solar energy and silicon research in West Bengal state.
In December 2008, SEMI PV Group (www.pvgroup.org) formed SEMI India PV; an Advisory Committee was established comprising executives from major solar cell, module, equipment, and materials manufacturers such as Signet Solar; Applied Materials; Solar Semiconductors; Moser Baer Photo Voltaic Ltd; Reliance Industries Ltd; Titan Energy Systems Pvt. Ltd; Orion Solar (I) Ltd. and Tata BP Solar India Ltd.
“The prominent developments mentioned above are sufficient to prove that India is one of the prominent markets for Solar PV and have shown us the way to organizing a PV mission to India,” says Edwin Koot, CEO of Solarplaza.
The challenge in India is not just making cells and modules, but effective financing, and engineering-in a balance between the system, distribution and maintenance. These are commonly referred to as downstream solar opportunities.
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