About 56 percent of India's 1.1 billion people do not have access to electricity. And as coal and oil reserves dip and global temperatures rise, it is becoming apparent that India’s appetite on coal-produced power, which accounts for 60 percent of its total greenhouse gas emissions, is dangerous.

The country’s ability to secure a reliable supply of energy at affordable prices will be one of the most important factors in shaping its future energy economy.

“Energy is an important input for economic development. Since exhaustible energy sources in the country are limited, there is an urgent need to focus attention on development of renewable energy sources and use of energy efficient technologies. The exploitation and development of various forms of energy and making energy available at affordable rates is one of our major thrust areas,” said Indian Prime Minister Manmohan Singh.

Renewables on the rise

According to Development Counsellors International (DCI), a United States marketing company, India is the second best country, after China, for business investment. With plenty of cheap skilled workers representing the nation’s labor force, there is a growing global interest in the country.

India saw a 12-percent rise in investment in renewable energy, like wind, solar, biomass and small hydro projects, with $4.1 billion being pumped into this sector last year, according to a United Nations Environment Program report.

The largest portion went to the wind sector, which grew at 17 percent from $2.2 billion to $2.6 billion in 2008. With 9,587.14 megawatts currently installed, India’s wind industry ranks as the world’s fifth largest.

Investment in solar energy also rose from $18 million in 2007 to $347 million in 2008, most of it for setting up module and cell manufacturing facilities.

While developed countries like the United States and those in Europe showed poor growth due to the global downturn, U.N.E.P. saw that developing countries were the bright spots in clear energy investment.

The increasing number of qualified engineers and scientists remaining in India, or those returning from the United States, should seize this opportunity according to Anil K. Rajvanshi, director of Nimbkar Agricultural Research Institute.

An Interest on the sun

Manmohan Singh, India’s prime minister, has shown keen interest in developing India's capacity to tap the power of the sun in order to increase sustainable sources of energy.

"The sun occupies center stage, as it should, being literally the original source of all energy. We will pool all our scientific, technical and managerial talents with financial sources to develop solar energy as a source of abundant energy to power our economy and to transform the lives of our people," Mr. Singh said.

With more than 5 million terawatts of sunlight falling on India every year, there has been much interest in solar power in the country. Shri Subramanian, former secretary of the Ministry of New and Renewable Energy said that the country has the potential to generate 35 MW per square kilometer using solar photovoltaic and solar thermal energy.

This potential inspired the Indian government to have a $19-billion plan to produce 20 gigawatts of solar power by 2020, draft documents show. Named the National Solar Plan, the 30-year scheme aims to increase the share of solar energy in India’s total energy mix.

If fully implemented, solar power would account to one-eighth of India's current installed power base, helping the world's fourth-largest emitter of greenhouse gas emissions limit its heavy reliance on coal.

India as a photovoltaic manufacturing Mecca

Last March 2007, the Indian government announced a semiconductor manufacturing policy. Dubbed the Special Incentive Package Scheme, the government will provide 20 percent of the capital expenditure during the first 10 years for semiconductor industries, including manufacturing activities related to solar PV technology located in special economic zones, and 25 percent for industries not located in the zone. The policy has already attracted a tremendous response, so far receiving nine proposals pertaining to solar PV-related manufacturing whose total worth is $18 billion.

Inspired by the policy, the Andhra Pradesh state government has set up FabCity in the capital, Hyderabad, estimated to cost $3.18 billion. Spread over 1,050 acres, it will house semiconductor manufacturing companies for the electronic hardware sector and fabrication units for solar photovoltaics.

To date, five photovoltaic companies are expected to build manufacturing facilities in the area. They are California-based Solar Semiconductor Private Limited and Michigan-based Titan Energy Systems Ltd. Titan has 50 acres dedicated to manufacture PV modules.

On the other hand, Moserbaer India Ltd has 100 acres; Nano-Tech Silicon India, 50 acres and California-based Signet Solar Inc, 50 acres.

It is not just foreign interests that are exploring the possibility of expanding solar PV capacities in India. Tata BP Solar, a joint venture between the giant Tata Group of India and BP Solar of the United Kingdom is investing $100 million in a 128-MW solar cell manufacturing plant with plans to scale up to 180 MW.

Tata BP Solar recently announced that it has signed an agreement with Calyon Bank (Credit Agricole CIB) and BNP Paribas to raise $78 million to fund further development. Tata BP Solar currently has a module manufacturing capacity of 85 MW.

Other initiatives and incentives

The Ministry of New and Renewable Energy has also produced a set of initiatives aimed at bolstering solar generation. Solar PV projects up to a maximum capacity of 50 megawatts are to be supported through financial incentives of a maximum of 24 cents/kilowatt-hour for photovoltaic projects and 20 cents/kWh for solar thermal power projects for 10 years. With investors rushing to set up solar power projects expected to contribute 2,500 megawatts of capacity, the Ministry is in talks with the Indian cabinet to expand the solar power program in its Eleventh Plan beyond 50 megawatts.

India is the only country in the world to have an entire ministry dedicated to renewable energy. It is also a founding member of Irena, the intergovernmental organization focusing on the sustainable use of renewable energies in both industrialized and developing countries.

Helene Pelosse, interim director general of Irena, described the potential of renewable energy in India as “immense.” – Oliver M. Bayani