Laying the Foundations for a Brighter Future: New Light on Indian solar industry

There’s no denying, India is developing at a breathtaking pace. New infrastructures are sprouting up every day, ever-growing numbers of cars are driving on ever-growing numbers of roads, houses are fitted with new appliances; yet, all this comes at the cost of a tremendous amount of energy. India is ready to rise to this challenge. However, if it wants to do so sustainably on a large scale, it cannot turn it back on the solar option. Thankfully, although much is still to be done, things seem to moving along in the right direction. A recently published Natural Resources Defense Council (NRDC) report entitled Laying the Foundation for a Bright Future provides an interesting outlook into the current state of solar energy in India. Indeed, there’s good reason to hope. For instance, Indian solar energy capacity went from 17.8 megawatts in 2010 to an impressive 506.9 megawatts in March 2012. That’s an astonishing advance over such a short time span and definite proof that there is interest in the solar market. However, the report also identifies three major hurdles on India’s road to solar sustainability. One is the technology gap between India and other countries. Two, albeit growing, the global industry is still very fragmented, mainly comprising numerous small-scale plants. Three, the industry is young and plagued by difficulties in obtaining raw materials, inverters and system components, slowing down growth in the sector and making self-sufficiency an issue for India. Obviously, there is still much to do and at many levels, ranging from component suppliers to solar energy producers, including distribution. But there’s a real interest in the burgeoning sector that materialized during the PV Manufacturing Summit on August 1and 2 in Delhi. On that occasion, key industry players met Tarun Kapoor, Joint Secretary of the Ministry of New and Renewable Energy, to discuss solar industry issues. This can be considered as a good starting point for addressing the conclusions of the NRDC report and fuel more energy into an already vibrant sector.

An unexpected treasure blowing in the wind

Some good news seems miraculous. A recent assessment by the Lawrence Berkeley National Laboratory reports that India has wind resources that are 20 to 30 times greater than the Indian government estimate of 102 gigawatts (GW). According to the study, the country’s wind potential could range from 2,006 to 3,121 GW, depending on turbine size.

The great news is that wind is one of the most cost-effective and mature renewable energy sources commercially available in India. According to Berkeley National Laboratory experts, the cost of wind power is now comparable to the cost of imported coal and natural gas-based plants. In other words, wind could become a significant portion of the country’s future energy portfolio.

However, a shadow looms over the good news. Although India’s Ministry of New and Renewable Energy (MNRE) has signed a memorandum of understanding with Berkeley Lab to collaborate on wind energy research, the government recently repealed key wind power tax breaks, which may seriously jeopardize future investments in the sector. With the tax change, wind development will only be allowed to claim accelerated depreciation of 15% of the cost of equipment, down from 80%. Government estimates show that the tax break prompted the setup of more than 70% of wind facilities in India during the year that ended on March 31.

If you are interested in the future of wind energy in India, please share your own thoughts and stories!