India has the potential to become a global manufacturing hub for solar power equipment given its low labour cost advantage and ever-growing electricity demand. However, the country has to adopt a holistic approach to realise its potential.
Drawing a clear road map for the sector, providing regulatory and policy clarity, removing supply-side bottlenecks and creating public awareness about the benefits of solar power in the fight against climate change would be the key components of an effective strategy to harness India?s potential in solar power business.
The government needs to put in place a regulatory framework and set long-term goals on solar power usage to attract serious investors into the sector. That would in turn help slash the cost of solar power generation, which is currently prohibitively high.
With tariffs for solar power still a long way off grid parity, the government has to provide incentives to help the sector take off. A long-term, consistent policy on this is a prerequisite to attracting investors.
?Government policies such as feed-in-tariff, renewable purchase obligation and tax rebates are essential for creating demand for solar power in the country,? global consultancy firm Ernst & Young (E&Y) says in a recent report ?Conquering the Sun?.
Besides providing policy support, the government has to formulate policy to improve domestic availability of key inputs like polysilicon and cell for solar power project developers.
Bottlenecks in the availability of skilled manpower is another issue that beckons a solution.
?Talented and skilled professionals can be attracted to the industry through various means such as industry-awareness programmes conducted at schools and colleges. In addition, necessary courses and vocational training could be launched at colleges and other educational institutes,? the report says.
India has agreed to reduce its carbon emissions on a voluntary basis. However, it might find it a tough challenge since the country continues to depend on coal-fired generation to meet its electricity needs.
With the economy projected to grow at 8-10% over the long term, the country?s energy requirement should also rise commensurately.
A switchover from coal to gas for power generation on a large scale would help. But the wide gap in domestic demand and supply of natural gas and volatility in the LNG market have held back the domestic power sector from making a desired switchover to gas based generation. The situation is not expected to improve significantly over the long term either.
In contrast, promoting the usage of solar power is a credible option for India to reduce its carbon footprint. Developing public awareness about the advantages of solar power is as important as creating generation capacity.
noor.mohammad @expressindia.com