While Europe and the United States have attracted major investments in solar energy in recent years, a growing number of solar outfits – big and small – are placing their biggest bets on significant and sustained growth in India’s solar energy market.
The prodigious amounts of electricity needed to power India’s emerging economy – which is grappling with supply shortfalls in electricity – combined with concerns about curbing carbon emissions has resulted in a patchwork of government policies and programs across India promoting investment in solar energy. These include a national REC market, feed-in-tariffs, tax incentives and so on and so forth.
With over 15 percent of the world’s population, India’s demand for electricity is already significant. India is already Asia’s third largest energy consumer, and primary electricity consumption is expected to rise at 6.4% annually from 2005 to 2020. Solar power capacity is projected to grow by 27% annually in coming years, according to the U.S. Energy Information Administration.
U.S.-based companies like Astonfield Renewable Resources Limited and Sun Edison have bet heavily on strong growth in India’s solar energy sector. Astonfield, which plans to invest $2 billion in the green energysector in India over a period of five years, is building a 250 MW solar photovoltaic power plant in the Indian state of Andhra Pradesh. These bets have also taken the form of ambitious joint ventures and technology partnerships with local firms and organizations.
For example, U.S.-based SunPower Corporation and Enterprise Business Solutions (EBS) have established a joint venture to build a $110 million manufacturing facility. SunPower and EBS also plan to construct a chain of solar power plants, including rooftop solar projects on government buildings, across the State of Punjab to generate nearly 1,000 MW of power over the next two years.
Roughly 400 million Indians remain without access to power. If India is to meet its projected GDP growth rate of 10%, with an average growth of 8% over the next 15 years, the country’s energy consumption must expand. The country faces a deficit of 11% in overall demand, and anywhere from 12-17% when demand peaks. Coal comprises over 71% of that generation, a share that is expected to decrease to 51% by 2035.
