When the Narendra Modi government scaled up the power generation target under the Jawaharlal Nehru National Solar Mission fivefold to 100,000 megawatts (Mw) last year, it seemed an overambitious target. A year on, that target continues to look daunting, but it certainly has acquired new dimensions. There are suggestions that the target and steps taken to achieve it should be used to show India's sincerity about clean energy at climate change talks. Several factors, domestic as well as global, have contributed to the dramatic change in outlook. The price of solar modules - which constitute the bulk of the cost of new solar power plants - has fallen by half in the last five years. This is due largely to increased competition following aggressive module manufacturing by China. Consequently, the prices of solar power, too, have declined steadily from nearly Rs 18 per unit in 2010 to nearly one-third of that now. In fact, recent bids for solar power in Madhya Pradesh and Telangana saw the prices drop to a mere Rs 5 to Rs 5.50 per unit, competitive with conventional thermal power.
These factors, coupled with liberal fiscal incentives and other promotional measures, have made the renewable energy sector investment-worthy even when oil prices are low. The sops on offer include subsidies on off-grid applications; mandatory renewable energy purchase obligations; import concessions and excise duty exemptions; accelerated depreciation; and tax holidays. Investors' renewed interest in this sector was visible at the first global renewable energy conference, "Re-Invest 2015", convened by the government early this year. It attracted commitments from foreign and domestic companies for the production of an incredible 217,000 Mw of renewable energy with an estimated investment of over $200 billion (approximately Rs 13.2 lakh crore at the current exchange rate) in the next five years. The bulk of these pledges were for solar energy; solar capacity addition seems set to overtake the wind capacity for the first time this financial year.
However, the availability of land for solar units remains a formidable constraint. Only a few states have come up with firm assurances on land and that too for just a few units of 1,000-Mw capacity each. Most states have big or small patches of waste and barren lands which could safely be allocated for solar energy production. However, their ownership and the willingness of the owners to part with these lands are an issue that needs to be addressed. Rajasthan and Jammu & Kashmir are believed to possess the most promising potential for solar power generation, largely because of the high solar radiation and existence of vast stretches of arid land in the two states - the Thar desert in Rajasthan and the cold arid zone in Ladakh. But whether prospective investors would be keen to set up units in areas with harsh climate and sparse logistical and other support is uncertain. Evacuation of power from such remote areas may also be problematic. Putting solar panels on top of the long stretches of irrigation canals that crisscross most states might be a better bet. Gujarat has already tried this with some success. Other states need to emulate its example, as it offers the additional advantage of reducing wastage of water due to evaporation.
