Atmanirbhar Solar: Can India Emerge As A Global Solar Manufacturing Hub?

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Governments all over the world are prioritizing the use of renewable energy to fulfill their energy requirements. Wind, tidal, geothermal, and hydroelectric are some of the few renewable energy sources that are gaining popularity, but the undisputed winner among them is solar energy.

Solar energy was not making significant progress until very recently due to the high costs and low returns. However, now both the private and public sectors worldwide are working together to make solar energy more affordable and accessible. Governments are creating a more conducive environment for solar energy companies to flourish and appear as a lucrative and cost-effective source of energy.

India is emerging as one of the leading countries focusing on increasing its solar capacity tremendously. India has set a target of having a solar capacity of 100 GW, of which it has already achieved 34.6 GW until now. With this, India has surpassed Italy and is now ranked fifth in the world in terms of installed solar capacity.

Let’s have a look at some of the key statistics related to solar energy and how it has transformed over the years.

Statistics

  • According to a report by the Central Statistical Office (CSO) and the Ministry of Statistics and Programme Implementation (MOSPI), India has an estimated solar power potential of 750 GW.
  • The same report suggests that Rajasthan, Gujarat, and Maharashtra are leading states in terms of solar power potential.
  • As of March 2020, solar power makes up nearly 9.8 % of India’s total installed capacity.
  • The Indian government aims to reach a goal of 100 GW by 2022 as a part of the National Solar Mission.
  • Globally, leading brands, including Apple, Amazon, Target, Walmart, and Google, each have invested in solar power to generate a capacity of at least 250 MW.
  • India initiated the International Solar Alliance in 2015, and it consists of more than 122 countries, with Eritrea, Luxembourg, and Saint Kitts becoming the latest entrants.
  • Since 1998, the prices of photovoltaic cells have dropped by more than 50 percent.
  • The global market size for solar energy is expected to reach $226 billion by 2026 growing at a CAGR of 20.5%.
  • The Global Module Price Index of photovoltaic cells has come down from $4 to less than $2.

Policies and Schemes by the Government of India

The government of India has launched several schemes for boosting solar power capacity in the country. Here are a few of them.

  • Development of Solar Parks and Ultra Mega Solar Power Projects – This scheme was rolled out in 2014 by the Ministry of New & Renewable Energy. Under this scheme, it was proposed that the government will set up at least 25 solar power stations to reach 20 GW of solar power capacity. This target has now been increased to 40 GW.
  • Grid Connected Solar Rooftop Programme – This scheme was introduced to ramp up the use of rooftop solar panels in residential buildings. The government will provide Central Financial Assistance (CFA) of up to 40 % of the benchmark cost. DISCOMs or power distributing companies will implement this scheme and people who want to avail it should consult their respective DISCOM.
  • Distributed Grid-Connected Solar PV plants in Andaman & Nicobar and Lakshadweep islands – This scheme was introduced with an intention to make these islands carbon-free by eliminating their dependence on diesel for power generation. PSUs like NTPC, NLC, SECI, etc can avail of this scheme and are eligible for CFA of up to 40 % on the project cost.
  • Off-grid and Decentralized Solar PV applications Programme – This scheme aims to install an additional off-grid solar capacity of 118 MWp through various measures. Some of these measures include installing 3,00,000 solar street lights all over the country and the distribution of 25,00,000 solar study lamps in the northeast region and Left Wing Extremism (LWE) affected areas.
  • Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM KUSUM) – This scheme is focused on adding 25,750 MW of solar and other renewable energy capacities by 2022 with the financial support of ₹ 34,422 Crore from the central government.
  • Recently, the Finance Minister announced a phased solar manufacturing plan to boost production. She has also proposed injecting ₹3 lakh crore in state-owned electricity distribution companies.
  • 15 companies including Adani Solar, First Solar, 1366 Technologies, and Vikram Solar are looking to invest around $3 billion in solar manufacturing in India. This comes in the backdrop of GOI’s production-led incentive (PLI) scheme that will provide benefits of up to ₹1.97 trillion to manufacturers.

Global Leaders

India is not the only country that is focusing on solar energy. The USA and China are covering massive grounds and are leading the race for solar power equipment manufacturing. Despite the support from the government, India is facing stiff competition from these two giants. Other countries like Canada, Germany, Brazil, and Japan are also making great progress.

India vs China
China is the global leader when it comes to solar power. They have already crossed the 200 GW mark in 2019 and currently, more than one-fourth of the world’s solar power is generated in China. Furthermore, they are leading exporters of solar equipment and up to 80% of solar modules and cells in India are imported from China.

On the other hand, India is also making rapid progress and witnessing exponential growth in terms of solar manufacturing and capacity. The initiatives and schemes mentioned above are meant to further boost production. The government is also planning to increase import duties on foreign solar goods to curb competition.

According to a report by International Energy Agency (IEA), these countries had the highest photovoltaic capacity in 2019:-

China: 204,700 MW (32.6%)
United States: 75,900 MW (12.1%)
Japan: 63,000 MW (10.0%)
Germany: 49,200 MW (7.8%)
India: 42,800 MW (6.8%)
Italy: 20,800 MW (3.3%)
Australia: 14,600 MW (2.3%)
United Kingdom: 13,300 MW (2.1%)
South Korea: 11,200 MW (1.8%)
France: 9,900 MW (1.6%)

Future Expectations
It is evident from these schemes that the Indian government wholeheartedly supports and encourages solar power adoption in the country. Currently, they offer a subsidy of up to 25 % for investment in capital expenditure of setting up a solar panel manufacturing unit. Experts predict that government will announce more schemes that will further boost production and capacity. We can expect to see several more startups in the solar manufacturing sector in the coming years. Also, innovations in technology are making solar cells far more efficient than before. Moreover, energy storage costs are also expected to go down as lithium batteries are becoming cheaper. It can be said that the future looks promising for solar energy.

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