AIR- Uses and Advantages of Solar Energy | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

Introduction

• With the burgeoning Indian population and the dwindling reservoirs of fossil fuels, meeting the escalating global energy demands solely through fossil fuel-based energy conversion may not be sustainable in the long run.
• India's solar power sector is experiencing rapid growth, boasting the lowest capital cost per MW globally for installing solar power plants.
• Currently, India relies heavily on fossil fuels, importing nearly 80% of its oil requirements and generating 60% of its electricity from coal-based thermal power plants, which are depleting rapidly.
• The adoption of solar products has been instrumental in catering to rural energy needs, with close to one million solar lanterns sold in India by the end of 2015, reducing the dependence on kerosene.
• India has played a pivotal role in advancing solar energy globally, spearheading initiatives like the International Solar Alliance (ISA) and proposing concepts like "One Sun One World One Grid" to harness solar power on a global scale.

Feasibility of Solar Power Installation in India

• The Indian government must acknowledge the imperative of fostering a robust domestic solar manufacturing industry capable of delivering high volumes of quality photovoltaic cells, modules, and associated equipment.
• Despite a modest domestic cell manufacturing capacity of 3.1 GW last year and heavy dependence on imports from China, ambitious solar power targets necessitate proactive government policies.
• Significantly, while promoting exports, equal emphasis must be placed on nurturing the domestic market.

India's Lag in Solar Panel Manufacturing

• India's lack of a comprehensive industrial policy since economic liberalization has translated into a lack of strategic planning for solar panel manufacturing.
• The country missed the opportunity to become a leader in solar panel manufacturing, despite the manufacturing sector contributing 16% to GDP in 1991.
• Despite the recent policy focus on solar plant installation, India continues to lag behind in solar panel manufacturing.

Government Initiatives

• Promotion of rooftop solar power generation on a wider scale.
• The Ministry of New and Renewable Energy (MNRE) extends a 30% subsidy to various solar-powered items and has now expanded its subsidy scheme to include solar-powered cold storages.
• Plans by the Ministry of Shipping to install solar-based power systems at major ports across the country.
• The Government of India offers a 10-year tax exemption for solar energy projects as part of its initiatives.
• The National Solar Mission aims to foster the development and utilization of solar energy for power generation.
• Renewable Energy Certificates (RECs) incentivize green power generation by providing financial incentives for every unit of power generated.

Lessons from China

Core Competence:

• The six largest Chinese manufacturers had core technical competence in manufacturing solar cells.
• Chinese companies possessed the necessary know-how when the solar industry began to flourish in China.
• Indian companies lacked a background in semiconductors when India's solar industry started growing in 2011.

Government Policy:

• The Chinese government subsidized land acquisition, raw materials, labor, and exports.
• There was a long-term commitment from the government to procure solar energy.
• In contrast, Indian companies faced challenges due to lack of government support.

Cost of Capital:

• India has the highest cost of debt in the Asia-Pacific region (11%), while China's is around 5%.

Challenges

• Limited access to easy and affordable funding, coupled with increased imports from China and Taiwan, poses a threat to the domestic solar industry.
• The restructuring of the country's power and energy infrastructure presents a significant challenge.
• The cost of solar power generation is higher compared to coal.
• High transmission and distribution losses, around 40%, make solar energy generation less feasible.
• India has low per capita land availability, making land a scarce resource for solar projects.
• Competition from Ultra Super Critical Coal Power Generation Plants, which are cheaper, emit less, and are more efficient.

Way Forward

• Strong financial measures, such as green bonds, institutional loans, and a clean energy fund, are needed to finance solar projects.
• Integrated policies supported by states are crucial, along with assistance for industry to set up facilities and access low-cost financing, as seen in China.
• Promotion of research and development in renewable energy, particularly in storage technology, is essential.
• Measures should be taken to address China's dumping of solar equipment.
• A framework to streamline policy decision-making and implementation is necessary.
• India requires a Solar Waste Management and Manufacturing Standards Policy.