Solar power in India had found it difficult to attain commercial viability for quite some time. It had generally been pushing forward in niche areas like rural electrification, which of course is justifiable in areas deprived from grid connectivity. Certainly alternative viable options to provide power to the remote rural population are an essential necessity for raising living standards. However, inhibitions about the potential of solar power because of its high cost seem to be slowly eroding and right steps are being taken by the government for boosting growth. After the government of India announced feed-in-tariff (FIT) to the maximum of Rs 15/kwh in case of grid connected systems in March 2008 West Bengal became the first state to declare FIT at Rs 11/kwh and other states are soon set to follow. The stream of applications for setting up solar photovoltaic (SPV) power plants varying from 1 mw to 5 mw has exceeded a figure of 1,000 mw by mid-April, despite the annual limits of 50 mw?5 mw for each installation and 10 mw for each state?declared by the government of India.
The aspirants to invest in solar power include entrepreneurs from all strata from Ambani group down to ordinary investors. Nevertheless, the restriction on annual capacity addition, mainly because of fears of FIT subsidy increasing beyond budget outlay, appears to have become an artificial barrier in the process to the growth of solar power.
India generates nearly 700 billion units a year and with 30% loss, consumption paid for is about 490 billion units. If a 2 paisa additional tariff is levied upon each unit it would raise resources to the tune of Rs 9.8 billion that can support annually solar power of nearly 55 mw without any strain on government budget except probably a little for those under BPL category. Otherwise also, this huge amount could be a driving force for subsidising interest rates on loan for renewable energy as a whole. A cess of 2 paisa for the sake of solar power to be shared equally by generation undertakings, transmission companies, distribution utilities and the consumers would not have any perceptible effect in the overall tariff structure. In fact, Rs 125 crore or so earmarked as subsidy from government of India under the present scheme should serve a more gainful purpose by subsiding interest rate to encourage solar power. About 50 mw restricted in a year under present policy will yield about 150 million units or an outflow of only Rs 150 crore. This amount can also be utilised as an incentive to provide interest subsidy to promote solar/wind power which will contribute to clean energy, set of new industries and employment.
The question comes up why solar power should be so favoured despite the high prices, even though it is shrinking at the rate of 50% in every 7-8 years. One reason is the disproportionately high reliance on fossil fuels and the need to not only to reduce their consumption, but also to switch over to sustainable non- polluting energy resources. Renewable energy as a sustainable clean resource fulfils both energy demand and will save the planet from further pollution and dangerous evils associated with it.
Amongst all the renewable energy resources, solar power is boundless. Solar facilities on even 1% of desert land can meet the total world energy. Another advantage of solar power is that it reduces dependence on water resources which is already is a growing constraint. FIT is the appropriate tool to promote solar or other renewable energy.
Potential of the solar energy was realised by the developed countries a decade back and they were at the forefront to promote it and build a global capacity of 8,000 mw. Japan, Germany, the US and Spain are in the forefront with clear cut policies to replace conventional thermal power by renewable resources, so that it reaches to 20% of total installation in 10 years? time. China is following the same and India must act to catch up.
?The writer is a consulting engineer