This Government seems ambitious. The target is to achieve 100 GW of Solar powered energy by 2022. The current installed capacity of solar power in India is 5.8 GW. We are talking about adding about 15.7 GW of solar power driven energy every year starting now. And we are already towards the end of 2016. Can India really achieve it?

The Financials

Looking at the current status of solar energy, about 12 GW of additional solar powered energy is anticipated to come on-stream by March 2017. The overall investments to achieve the 2022 targets will be in the lines of INR 6 crores per MW, as per Mr. Piyush Goyal, the power minister. And that means a total of INR 600,000 crores for the 100 GW which is being aimed.

The current budget allocation to solar energy is INR 2,708 crores which is just enough to add about 450 MW annually. As per International Energy Agency (IEA) reports, India can achieve 40 GW in solar photovoltaic capacity by 2022, assuming there is financing available and the raw materials are available at a low cost. The IEA outlook also suggests that the share of all renewables in power generation will increase from 17% in 2014 to 26% by 2040. In fact, the outlook suggests that if this happens then by 2030, India will surpass United States and European Union, in the overall power generation via solar energy.

Where Is The Funding?

The Government is looking at multiple funding options to increase investments in the solar energy sector. One of the initiatives taken by the Government is Re-Invest, which is an annual meet for renewable energy investors. The Government is looking at public, private and proprietorship firms to invest in the renewable energy sector, with project costs amounting to INR 7 crores per MW. As per the latest document available on the Re-Invest website, as of June 2016, the Government has received commitments for financing 78.753 GW of renewable energy projects, from various financial institutions including foreign banks. Apart from this, foreign investors (14 companies from 7 countries), 22 public sector companies, 257 private sector companies and the railways have given their commitments to 266 GW of renewable energy.

So there is funding on the way. What is important to understand is that how is the Government planning to generate this 100 GW of solar energy?

Generation Challenges

Out of the 100 GW of solar power to be generated in 2022, the Government plans 40 GW through de-centralized rooftop projects, 40 GW through utility-scale solar plants and 20 GW through ultra-mega solar parks.

While solar rooftop installations are considered to be ‘green energy’, they come along with a myriad of issues. The high capital investment requirements, including securing the panels to the roof, the maintenance that is required for the panels as well as the fact that rooftop solar installations may not really be that cost effective. One of the reasons why rooftop installations seem to save money for individual households is that they are heavily subsidized in countries like US and Australia. One also needs to consider the fact that the most efficient solar panels have efficiencies of about 22 to 24%. The average is much lower than this. Apart from this, the efficiency lowers when the panels are covered with dust, an issue which is definitely going be occur in India. So this generation of 40 GW of energy through rooftop installations needs a hard look before commitments.

Utility scale solar plants, which are expected to generate 40 GW by 2022, will require land commitments (which may prove to be a major hindrance point), grid connectivity and regular operations and maintenance. Another 20 GW of solar power is expected to be generated from the ultra-mega solar parks, of which approvals have been given for 33 parks in 21 states. These large scale projects will be using photovoltaic cells to generate electricity. But is photovoltaic really the way ahead or are there more efficient technologies which can be used to generate electricity via solar power in the long run?

Are solar thermal systems with Fresnel lens or concentrated solar power technique more efficient ways to generate energy from the sun? Usually for large scale solar power plants, solar thermal energy is a viable option. This is because, unlike photo voltaic which works well for small installations like a rooftop supply to an individual household, large scale installations of photovoltaic cells don’t provide enough efficiencies. In case of solar thermal plants, the solar radiation is converted to steam, which can be used to run a conventional turbine, thereby generating electricity. In developed countries like USA and Spain, it is solar thermal technology, which is mainly used in large scale plants.

May be it is the captive small scale solar power plants which will make more sense in a vast country like India, mainly because the remoteness of the villages and towns often makes transmission and distribution losses very high, which means, that having an in-situ solar power plant, may be backed up by natural gas, will make the entire system more efficient.

Transmission and Distribution Challenges
India’s distribution losses were among the highest in the world, estimated to be about 27% in 2014. In July 2016, Tamil Nadu was unable to use all the solar power it generated, mainly because of connectivity issues with the national grid. There is a serious need to either construct an interstate green energy corridor which allows the easy transmission of electricity, or look at alternatives like producing in-situ solar power in a small scale basis, to avoid wastage.

The existing power grids are very old in India and are not equipped to handle renewable energy very efficiently. Additionally, while about 80% of the total solar power is mainly generated in the southern and western parts of India, the demand from these states is about 40%. This means that unless India gears up with a good distribution and transmission system for the solar energy produced, there will be issues of wastage.