India’s Quest for Solar Dominance

This editorial draws from “Solar Strategies,” which was published in The Hindu Business Line on September 20, 2024.

The article outlines India’s solar ambitions to achieve 570 GW capacity by 2030, exceeding global commitments, alongside significant investments and domestic manufacturing initiatives. To unlock its full potential, India must expedite solar capacity additions while reducing dependency on Chinese imports.

For Prelims: Current Status of India’s Solar Sector, Clean Energy, Production Linked Incentive (PLI) scheme, Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan, India’s Carbon Credit Trading Scheme.

For Mains: Importance of Solar Energy Dominance for India, Major Challenges Facing the Solar Sector in India.

India’s solar aspirations have reached new milestones following the recent REINVEST meeting in Gandhinagar, which attracted renewable energy investment proposals amounting to USD 386 billion and aims to create 570 GW of solar power capacity by 2030. This ambitious goal positions India to exceed its global commitment of 500 GW of non-fossil fuel capacity by 2030. However, to realize its estimated solar potential of 749 GW, the country needs to significantly ramp up its current annual capacity additions of 10-15 GW.

The drive for solar leadership extends beyond clean energy; it has strategic geopolitical implications. Recent policy changes, including production-linked incentives for solar cells and modules, along with the Approved List of Models and Manufacturers (ALMM), aim to diminish reliance on Chinese imports and enhance domestic manufacturing. Although this protectionist strategy may elevate domestic power costs in the short term, it sets the stage for India to emerge as a global hub for solar technology production.

Current Status of India’s Solar Sector

Overview: India is the third-largest energy consumer globally and ranks fifth in solar power capacity (REN21 Renewables 2024 Global Status Report).
At COP26, India committed to achieving 500 GW of non-fossil fuel-based energy by 2030, as part of the Panchamrit initiative—the largest renewable energy expansion plan worldwide.

Solar Energy Growth:

• Installed solar energy capacity has surged 30-fold in the last nine years, reaching 89.4 GW as of August 2024.
• India’s solar potential is estimated at 748 GWp (National Institute of Solar Energy, NISE).

Investment and FDI:

• 100% Foreign Direct Investment (FDI) is permitted under the automatic route for renewable energy generation and distribution projects, in line with The Electricity Act 2003.

Significance of Solar Energy Dominance for India

Energy Independence:
India’s push for solar energy is a crucial element in its pursuit of energy independence. With over 80% of its oil needs imported, solar power offers a pathway to lessen this reliance. The ambitious target of 500 GW non-fossil fuel capacity by 2030, with solar at the forefront, is underscored by the recent REINVEST meeting in Gandhinagar, which attracted USD 386 billion in investment proposals. This transition not only enhances energy security but also shields the economy from global oil price fluctuations, evident from the stability of renewable energy prices during recent global energy crises.

Economic Catalyst:
The solar sector is poised to be a significant economic driver for India. It is projected to create 3.26 million jobs by 2050, with over 29,000 people already employed as of 2021-22. The government’s Production Linked Incentive (PLI) scheme for solar manufacturing, with an outlay of ₹24,000 crore, aims to significantly boost manufacturing capacity for fully and partially integrated solar PV modules, generating jobs and positioning India as a potential global manufacturing hub.

Climate Change Mitigation:
Solar energy is integral to India’s climate change mitigation strategy. Installed solar capacity has increased from 2,820 MW in March 2014 to 72,002 MW in October 2023, making India the fifth-largest solar power producer globally. The introduction of India’s Carbon Credit Trading Scheme further incentivizes solar adoption, potentially accelerating the transition and positioning India as a leader in climate action among developing nations.

Rural Electrification:
Solar power is transforming rural electrification in India, providing energy to the most remote areas. The Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) scheme aims to add 30.8 GW of solar capacity by 2026, while initiatives like the Solar Charkha Mission empower rural artisans, showcasing solar’s potential to bridge the urban-rural divide.

Technological Innovation:
India’s solar ambitions are spurring significant technological advancements. Indian researchers have developed stable, low-cost carbon-based perovskite solar cells with excellent thermal and moisture stability. The establishment of the National Institute of Solar Energy (NISE) as an autonomous R&D institution further underscores this commitment. Innovations have led to price reductions of 65% for solar cells and 50% for modules in 2022, making solar increasingly competitive with traditional energy sources.

Major Issues Related to the Solar Sector in India

Land Acquisition Challenges:
Land scarcity is a major obstacle for large-scale solar projects in India. Solar power plants require at least 5 acres of land per 1 MW output; achieving the 500 GW renewable energy target by 2030 could necessitate over 1.5 million acres for solar alone, often conflicting with agricultural and habitation needs and leading to social tensions. For example, the 5,000 MW Dholera Solar Park in Gujarat faced protests from local farmers, delaying implementation. India’s complex land ownership laws exacerbate the issue.

Grid Integration and Infrastructure Bottlenecks:
The intermittent nature of solar power presents challenges for grid stability. India’s grid infrastructure, primarily designed for conventional sources, struggles to manage solar generation variability. Transmission losses stood at about 16.4% in 2021-22, significantly above the global average, and recent grid failures, such as the one in Mumbai in October 2020, highlight systemic vulnerabilities.

Financing and Investment Hurdles:
Despite recent investment proposals, securing consistent financing for solar projects remains challenging. Outstanding dues of electricity distribution companies dropped by one-third to ₹93,000 crore by May 2023 due to the Late Payment Surcharge (LPS) Rules, yet significant liquidity pressures persist. While green bonds and specialized financial instruments are emerging, scaling these funding mechanisms to meet sector needs is critical.

Technological Dependence and Manufacturing Gaps:
India’s solar sector heavily relies on imported technology, particularly from China. Despite recent policy pushes to increase domestic manufacturing, capacity remains limited. The absence of a robust domestic supply chain for critical components increases vulnerability to global supply disruptions, as seen with the rise in polysilicon prices post-July 2020.

Storage and Round-the-Clock Power:
The lack of cost-effective energy storage solutions hampers solar power’s full potential. With solar generation limited to daylight hours, meeting evening peak demand is challenging. India’s current battery storage capacity is just 20 MWh, while a projected requirement of 74 gigawatts by 2032 exists. The high cost of battery storage makes 24/7 solar power economically unviable for many applications.

Environmental and Social Impacts:
While solar energy is clean, its large-scale deployment can have environmental consequences. Solar parks may cause habitat destruction and biodiversity loss. The Bhadla Solar Park in Rajasthan, one of the largest globally, has raised concerns about its effects on local ecosystems. Moreover, managing the end-of-life disposal of solar panels is a challenge, with India expected to generate 34,600 tonnes of solar panel waste by 2030 and lacking a comprehensive recycling policy.

Steps India Can Take to Enhance the Viability and Efficiency of Solar Energy

Streamlined Land Acquisition and Innovative Land Use Policies:
Implement a centralized land bank for solar projects to identify and pre-clear suitable non-agricultural lands. Introduce a national agrivoltaics policy to incentivize dual land use for agriculture and solar generation. Simplify leasing regulations for longer terms and encourage solar installations on brownfield sites.

Grid Modernization and Smart Integration Technologies:
Invest in smart grid technologies and energy management systems to handle solar power variability. Implement advanced forecasting tools and upgrade transmission infrastructure to focus on high-capacity interstate lines dedicated to renewables.

Innovative Financing Mechanisms and Risk Mitigation Tools:
Establish a dedicated Green Bank for renewable energy projects offering low-interest loans. Introduce solar-specific green bonds and implement a national payment security mechanism to mitigate risks from delayed payments.

Domestic Manufacturing through Technology Transfer and R&D:
Phased manufacturing programs for the solar value chain and joint ventures with global tech leaders can enhance capacity. Increase R&D funding for next-generation solar technologies, leveraging successes from Indian institutes.

Comprehensive Energy Storage Policy and Infrastructure:
Develop a national energy storage mission with targets for various technologies, and promote co-location of storage with solar facilities. Encourage cost-effective large-scale solutions like pumped hydro storage.

Skill Development and Workforce Training Programs:
Create a network of solar skill development centers, integrate solar tech courses into vocational training, and establish a national certification program for installers. Expand programs like the Suryamitra Skill Development Programme to modernize training.

Water-Efficient Cleaning Technologies and Practices:
Mandate robotic dry-cleaning systems in water-stressed areas, invest in hydrophobic coatings, and implement rainwater harvesting systems for cleaning.

Accelerating Rooftop Solar Adoption:
Revamp the rooftop solar ecosystem with a unified net metering policy and introduce innovative financing models to reduce upfront costs. The Pradhanmantri Suryoday Yojana aims to equip 10 million households with rooftop solar panels, necessitating streamlined approval processes.

Conclusion

India’s ambitious solar targets are crucial for achieving energy independence and fostering economic growth, climate action, and technological innovation. By emphasizing grid modernization, innovative financing, domestic manufacturing, and sustainable practices, India can realize the full potential of its solar energy sector and establish itself as a global leader in renewable energy production. A comprehensive approach is essential for ensuring long-term viability and efficiency in the solar arena.

Explore our courses: https://apnipathshala.com/courses/

Explore Our test Series: https://tests.apnipathshala.com/