India is blessed with plenty of sun as is evident from high solar irradiation, technically termed as insolation. Yield of energy from solar photo-voltaic (SPV) system varies from 4-7 kwhr/day per kw of installation at different places on average throughout the year. In Rajasthan, Punjab, Haryana, Andhra Pradesh and Leh in Kashmir, insolation is very good to signify high-energy output.
Despite its large potential, India has been lagging in solar power generation on account of a number of factors, an important one being the absence of a policy that encourages feed-in-tariff. Now that it has been introduced, it has paved the way for a good take off. This is indicated from applications submitted within 3 months of the policy declaration for grid connected power plants to be eligible for higher feed-in-tariff. Against the stipulated capacity of 50 mw during the 11th Plan, entrepreneurs have come up with proposals exceeding 2,000 mw involving investments of about Rs 40,000 crore and the government is also revising the target to 1,000 mw. Currently, grid connected capacity is less than 3 mw, though the capacity of combined installations including rural electrification, street lights, pumping sets etc are above 120 mw. Solar Energy Parks in line with technology parks or Wind Energy Farms will give a further boost to SPV.
Notwithstanding the potentiality of SPV energy and the potential of a new set of industries to grow, based on this technology, the high capital cost, which is almost four times the thermal power, is still an impediment. Feed-in-tariff as recently declared, very low maintenance & operation cost and obligations imposed by regulatory commissions on compulsory purchase of renewable energy by utilities will address all deterrents effectively. Global endeavour through R&D and experience of bulk application are reasons for lowering capital cost. It is a silver lining since this, coupled with incentives in the tariff, enables investment on solar power projects to show positive returns with pay back period varying between 7-9 years that was hitherto known as unremunerative and unaffordable.
Experts foresee that within ten years, the price of solar energy will be very close to that of conventional power. In India, adverse elements are exerting high pressure on growth of renewable energy and amongst them solar power potential is highest to ensure energy security.
It may be pertinent here to discuss about great roles that states like Rajasthan and Gujarat can play in the development of SPV energy. These states are already steps ahead to declare incentive based feed-in-tariff and inviting investors to set up SPV power plants. Desert would be ideal for setting up these plants with high insolation levels that can be augmented further through tracking technology to produce as much as 8.5-9.0 kwhr/day/kw of installations. It will be a good gesture to allow 2% interest subsidy, considering most backward areas with promising potential of generating thousands of mw of SPV power in lands which have no other gainful utilisation. The amount involved is nominal on a reducing scale till the loan is repaid.
Economic gains out of power plants and other activities will be much higher than amounts given on interest subsidy and feed-in-tariff. A forward looking step could result in Rajasthan and Gujarat to be biggest solar energy hubs in the world. Global Energy NetWork Institute (GENI) in its publication on Thar desert visualises prospects of 25.87 X103 TWH of annual energy output.
Estimates for a 100 mw plant indicates SPV schemes to be viable for earning profit after comfortably carrying out all debt service obligations. Adequate surplus on funds deployed by investors is generated to pay dividend and/or building up reserves even after rolling back of the feed-in-tariff to the normal Rs 6 as usual rate after 10 years. Both the governments of Rajasthan and Gujarat must have a very aggressive outlook in this matter to generate SPV power in the desert for ensuring best return on land having no productivity, to export power, earn revenue and contribute substantially to meet the power demand of the country keeping in view potential is 20 mw per sq km. The desert offers scopes to generate more than 6,00,000 mw of clean power. Knowing fully well, preparations for setting up a 100 mw plant in the desert will take 5 years? time the process should start now as joint venture with private participation without any delay.
?The writer is an energy consultant. crbhatt@ vsnl.com