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: It makes sense to instead boost capital subsidy and infrastructure to attract local manufacture.

Even with the best of incentives, the industry will take time to grow. It took Germany, which has the most cited renewable programme in the world, 10 years to add its first 100 mw of solar generation capacity, but breezily added 2000 mw in next 5 years.

The current incentive policy in India sets out overall and state-level caps. This risks fragmenting capacity and discourages economies of scale. Today solar technology is amenable to grid applications, and higher capacity generating plants are being set up. In end-use, too, 90% of all solar installations globally are on-grid now, and small-scale systems have given way to larger ones.

The market development in many parts of the world has focussed on residential and other distributed installations. The dense and mixed nature of our cities makes this a less likely path for us. A more viable approach is to focus on supply-side and on IPPs; it will attract more investors, bring innovation and new business models.

Promotion of solar industry also brings extended benefits of exports, services, and new chemical, metallurgical and semiconductor technologies. We missed the semiconductor bus earlier. The solar industry takes its roots from the semiconductor industry, bypassing it last year as the larger user of silicon. We now have an opportunity to catch up on both.