Booming solar energy market in India

April 12, 2011 10:04 pm

Indian Renewable Energy sector is rapidly growing with the share of total capacity rising from 2% in 2003 to around 10% in 2010. Total installed power generation capacity of Renewable Energy in India is around 18 GW (Ministry of Power). Out of that Wind Energy contributes almost 70% followed by Small Hydro at 15%, Biomass Energy at 12% and remaining 3% includes solar and others RE sources.  Long pay back periods, low plant load factors and requirement of large area of land are the main barriers behind this slow growth of solar energy. The share of solar energy in India’s total installed power generation capacity is very low but however it has shown considerable growth in last decade.

What does science say?

Earth receives 174 peta watts (PW) of incoming solar radiation at the upper atmosphere. Out of that approximately 30% is reflected back to space. Rest of the radiations are absorbed by clouds, oceans and land masses.  The amount of solar energy reaching to the earth’s surface is about two times that of all other conventional sources – such as coal, oil, natural gas, and mined uranium available on earth. This itself shows the huge potential of solar energy.

Why go for Solar in India?

India has a vast solar energy potential. About 5,000 trillion kWh/year of energy is incident over India’s land area with most parts receiving 4-7 kWh per sq. m per day.  (JNNSM document)

The reasons behind encouragement of the Indian solar sector are as follows – India has very high solar isolation (as discussed above), India has a huge electricity demand supply gap , Lack of power grid availability, Increasing expenses and unreliable electricity supply, availability of more efficient solar technologies and GovernmentSupport (Discussed below)

How MNRE helps solar energy projects?

The world’s first exclusive ministry for renewable energy development, the Ministry of Non-Conventional Energy Sources (MNES was established in 1992.  Since Oct 2006 it is known as ‘Ministry of New and Renewable Energy’) implements various schemes to help the Renewable Energy sector. Following points elaborate the kind of government’s support to RE developers in the country.

1) National Action Plan on Climate Change (NAPCC) induced Government’s policy mandating an increased percentage of  electricity to be generated from Renewable Energy (NAPCC envisages renewable energy to constitute approximate 15% of the energy mix of India till 2020)

2) Subsidy Scheme to Promote Solar Energy through the Jawaharlal Nehru National Solar Mission (JNNSM–With target of 20,000MW till 2022)

3) International Climate Change treaties (e.g. Kyoto protocol)

Power Deficient regions with regular blackouts of 8-10 hours (Load shedding) and large power demand from India’s fast Growing Economy triggered government’s attention to invest considerable time and money in this sector. (Know more about Indian electricity scenario)

How many government’s schemes are available for solar energy development?

I’ve mentioned only those schemes which I am aware of. There is a possibility of the existence of more such schemes.

Sr. NoMNRE Schemes for Solar Projects
1Generation based incentive for grid interactive solar power generation projects (January, 2008) (PV and Thermal both)
2Programme on “Accelerated development and  deployment of solar water heating systems in domestic, industrial and commercial sectors” during 2008-09 & 2009-10 (Dated: 18th August, 200)
3Revised Scheme on “Demonstration and Promotion of Solar Photovoltaic Devices/ Systems in Urban Areas & Industry”
4Continuation of the Scheme on “Promotion of Solar Thermal Systems for air heating/Steam generating applications, Solar buildings and Akshay Urja Shops” for implementation during the financial year 2010-11.
5Implementation of the programme on “Development of Solar Cities” during 11th Plan period including 2010-11.

Is Renewable Energy Certificates (REC) mechanism applicable to Solar projects?

Yes, REC mechanism includes solar power projects. A brand new REC mechanism was launched by the Indian government in 2010. Renewable Energy Certificates (RECs) are a type of environmental commodity intended to provide an economic incentive for electricity generation from renewable energy sources. One REC is created when one megawatt hour of electricity is generated from an eligible renewable energy resource. There is also provision to separate RECs from the solar projects and non-solar projects by considering high cost associated with solar power generation. Presently solar REC have fixed price band of 12000-15000 INR/REC. (Know more about REC mechanism)

How many solar energy plants are functioning in India?

Well, it is difficult to find out the number of solar energy plants in India as I did not find any such list on government departmental websites and other credible sources. I’ve some data of solar energy plants but it is not complete so please don’t consider these numbers to be actual.

Sr. NoPower plant developersCapacity
1Titan Energy ,KPCL, Yelesandra village near Bangarpet, District- Kolar, Karnataka3 MW
2Azure Power, Awan, Punjab India.2 MW
3Photon Energy Systems, Itnal & Chikodi towns, Belgaum, Karnataka State.3 MW
4North Delhi Power Ltd (Tata Power), Delhi.1 MW
5Lanco Energy, Gujarat.5 MW
6Titan Energy, Jamuria, West Bengal2 MW
7Moser Baer, Chandrapur Maharashtra1 MW
8Reliance Power, Thyagaraj Stadium Plant, Delhi1 MW

From the above information it is clear that solar energy market is picking up its pace in India. However there is a need to encourage Incubators for Solar Energy enterprises. MNRE, Department of Science and Technology and some University departments are also providing assistance for solar energy projects in the country.  These institutions create scheme, provide technological solutions, infrastructure support and guidance to help convert ideas into marketable products.

On another side, there is a lack of investments in this sector due to financial un-viability of the project (Long payback periods and less PLF). It can be minimised by using government’s support and evolving more efficient technology. We also lack solar energy potential map of every possible part of the country. Using Remote Sensing and Geographical Information System can help to create solar resource maps.

The future is bright with the SUN 

Read more on –

How solar PV projects can earn carbon credits?

National Solar Mission

Summary of Incentives and Subsidies for Renewable Energy Products by MNRE

Image credit: wikipedia

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