The Hindu Business Line : Ray of hope for solar power

India’s energy sector seems set for a sea change. The Special Incentive Package Scheme (SIPS), announced last year to encourage the manufacture of photovoltaic (PV) cells and generation of solar power, has met with an overwhelming response. As many as 14 proposals worth Rs 136,000 crore are now before an appraisal committee, which will vet them with a view to extending the investment subsidy of 20-25 per cent proposed under SIPS. It would be a mistake to attribute this expression of investor interest merely to the attractive subsidy on offer. The world energy scenario is changing rapidly, particularly for emerging economies such as India and China, whose growth ambitions could come a cropper merely on account of the rising costs of oil and coal. If wind power generation has risen sharply in the last decade to account for 80 per cent of India’s renewable energy output of over 10,000 MW, the next decade could belong to solar. While the installed capacity for wind power is close to 8,000 MW, it is little more than 2 MW in the case of grid-connected solar power. This could change, with mass production of silicon semi-conductors.

India is a bit player in the world photovoltaic cells market, yet 69 per cent of its modules are exported. The rest are put to use mainly in telecommunications and lighting homes. If solar PV modules are the rage in industrialised countries — despite the fact that their energy efficiency is 15-20 per cent — it is because of rising fossil fuel costs and the need to contain greenhouse gas emissions. Germany, Spain, Japan, China and the US are the leading PV module makers, with Germany making up almost half the world’s output of about 3,800 MW. China’s PV cell output was 820 MW in 2007 — 10 times that of India. It is time India broke into the big league, so that the technological transition in this sector does not pass it by.

The challenges lie at two levels: increasing the efficiency of silicon chips and eventually phasing out silicon for nanotechnology alternatives, which can bring down the cost of production of solar power to half that of thermal power. Japan is confident of increasing the energy efficiency of silicon chips to 40 per cent and reducing the cost of solar power generation from 46 yen per kilowatt hour to seven yen per KwH. Mass production of PV modules will enable India to intensify research and development efforts, so that it can reduce costs from current levels of Rs 15 per kilowatt hour. Solar power deserves a leg up at this stage. However, the government should ensure that its capital subsidy delivers outcomes in terms of higher exports and power generation.

Related Stories:
Govt approves setting up of solar mission
Solar energy sizzles worldwide
India holds potential for solar energy play

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