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Can solar shift India’s renewable energy story?

April 30, 2024
tags:#India, #solar power, #renewables
by:Udisha Srivastav, Shreya Sojatia
India is aggressively promoting solar energy production and consumption through various lucrative schemes and impactful discussions at international forums. But its path towards clean, green energy is fraught with challenges.

Modhera village, located in Gujarat's Mehsana district and known for its centuries-old Sun Temple, became India's first fully solar-powered village in 2022, showcasing the country's growing ambition in the solar energy sector.

Thanks to a collaboration between the central and state governments, which invested approximately USD 9.7 million, the village now boasts a ground-mounted solar power plant, and over 1,300 homes are equipped with rooftop solar systems to generate electricity.

"Solar rooftop panels have allowed the villagers to live in a more improved and cost effective manner, as they get 24/7 electricity with no power cuts; the electricity bills of households also got reduced," said Richa Parmar, deputy director at the National Institute of Solar Energy (NISE), an autonomous institute operating under the Ministry of New and Renewable Energy. In addition to providing clean energy, she added, rooftop solar panels have also created a new source of income for local residents.

The village's solar systems are connected to a battery energy storage system that delivers constant solar energy - more than the daily consumption needs of the villagers. As a result, they can sell the excess power back to the grid and earn additional income.

While Modhera village has made significant strides in the solar energy sector, fossil fuels still account for about half of India's overall energy production. Let's explore a snapshot of India's energy generation landscape.

India’s Energy Story 

India’s energy consumption ranks third globally, with coal accounting for nearly 50 per cent of the total energy generation in the country. Renewable sources contribute 41 per cent, of which solar represents 16 per cent, hydro 11 per cent, and nuclear 1.6 per cent.

Overall, India heavily relies on other countries for its energy needs, importing 90 per cent of its oil and 80 per cent of its industrial coal. 

In recent years, India has shown a growing reliance on renewables, witnessing a remarkable 21 per cent surge in energy generated from renewable sources between 2014 and 2023. 

Speaking to FairPlanet, Akshay Arora, a Gurgaon-based solar expert, said, "[The use of renewable energy] isn’t sector specific per se. Most of the export oriented companies in India started using renewable energy because a lot of American and European companies mandated the reduction in carbon footprint, as they have to control their scope 3 carbon footprint as well."

India’s Power Push Towards Solar Energy 

According to the Renewables 2023 Global Status Report, India ranks fifth globally in total installed solar capacity, which has seen rapid growth over the years, rising from a modest 3 GW in 2014 to 66 GW.

Moreover, NISE estimated in 2014-15 that India has a combined solar potential of 750 GW.

"A number of government efforts are being made in order to provide efficient micro/mini grid solar powered solutions to ease the lifestyle and everyday activities," shared Parmar, adding that the most recent solar potential analysis is currently in progress. 

India's accelerating solar ambitions are driven by increasing adoption in residential areas. Jayesh Chhatiawala, a businessperson from Gujarat, was introduced to solar panels in 2010 during the construction of his new house. Intrigued by the technology, Chhatiawala researched the subject more deeply, contacted a vendor and ultimately installed a 10 kWh capacity solar rooftop system on his new home.

Chhatiawala told FairPlanet that his was the first off-grid house in the entire state of Gujarat. 

Despite the higher initial cost compared to a gas-based generator, Chhatiawala opted for solar panels, benefitting from government schemes that reduced the cost from an original USD 21,500 to USD 10,795.

Chhatiawala was drawn to solar energy for its clean, green credentials. He stated that he reached the break-even point within just a few years, and for over a decade, his family of seven has paid almost nothing for electricity.

Chhatiawala's case reflects a broader trend of solar adoption across numerous socio-economic backgrounds in the country. According to a 2023 report by the Council on Energy, Environment and Water, more than 250 million households in India have the potential to install 637 GW of solar energy capacity on their rooftops. India has set a target to achieve 500 GW of installed electricity capacity from renewable energy by 2030.

Shifting Gears: India’s Solar Initiatives 

Among various initiatives aimed at boosting residential adoption of solar energy, the introduction of the Pradhan Mantri Suryodaya Yojana scheme marks a significant policy shift in India. Launched in January 2024, this scheme is designed to provide solar rooftop panels to 10 million households, enabling them to save roughly USD 180 to USD 216 per year, while also receiving 300 units of free electricity each month. The cost of installation is shared between the government and the homeowner under this scheme.

The government has established subsidies for residential solar installations. For systems up to 2 kW, subsidies of USD 360 per kW are granted; for systems up to 3 kW, the subsidy is USD 215 per kW; and for systems exceeding 3 kW, the total subsidy available to customers is capped at USD 936.

Kartik Sachdeva, the director at New Delhi-based Energific Solar, an empanelled vendor under the above-mentioned scheme, has observed a significant surge in inquiries for solar installations since Prime Minister Narendra Modi announced a solar rooftop scheme earlier this year. "The introduction of new subsidies and schemes has made the break-even period shorter compared to previous times," he told FairPlanet.

In addition to the Pradhan Mantri Suryodaya Yojana, the government launched the Solar Park Scheme in December 2014, aiming to establish over 50 solar parks across 12 states in India. This initiative simplifies the process for setting up solar power projects, as highlighted by Arora, the Gurgaon-based solar expert. "Since the entire solar asset is in one place, it makes it cheaper to maintain and safeguard the system, while supplying energy to multiple consumers," he said. 

The continued expansion of solar parks is expected to increase India's solar energy capacity to around 38 GW by 2025-26, Arora predicted. He pointed out that this target is nearly five times greater than the peak energy consumption of New Delhi, which is around 7 GW, emphasising the significant potential of solar-generated energy to exceed daily energy requirements.

Additionally, in April 2021, the government launched the production-linked incentive (PLI) scheme, known as the National Programme on High Efficiency Solar PV Modules, to encourage the installation of made-in-India solar panels on rooftops. Under this scheme, PV module manufacturers receive production-linked incentives for five years following commissioning, based on the manufacturing and sale of these modules. The scheme has been rolled out in two phases.

The initial tranche (from April-December 2021) involved an investment of around USD 539.1 million. In the subsequent phase (from September 2022-April 2023), the government allocated a total capacity of 39,600 MW of domestic solar PV module manufacturing to 11 companies, earmarking USD 1,678 million. 

Will The Road Ahead Be Too Sunny? 

As India moves to realise its solar ambitions, it faces persistent challenges. Asked about whether there is sufficient awareness on the ground, Arora said, "The challenge of grassroots knowledge was true until two to three years ago; it's no longer a concern in Tier-1 cities and industrial belts across the country."

"Earlier," he added, "solar installation companies had a dual job. First, they needed to convince customers to go solar, and second, they needed to convince customers to choose them. Now, the first part is not to be done anymore." He further stated that around 70 per cent of customers are already educated about the industry and the products.

Echoing Sachdeva’s observations on the growing interest in solar energy, Arora noted that although the Pradhan Mantri Suryodaya Yojana offers a strong value proposition, the general policies still do not sufficiently appeal to the broader population.

"The implementation is bad wherever policies are favourable. There has to be grassroots awareness with government offices, government agencies, and not just the consumers," he said. 

Another challenge is the import of solar modules from countries like China. Although India’s solar module imports from China has been slashed by approximately 80 per cent in the first half of 2023, the country still strives to further strengthen its domestic manufacturing capabilities.

But some experts warn that India's challenges will continue even with widespread adoption of solar power. According to the International Renewable Energy Agency, India is expected to become the fourth-largest producer of solar panel waste by 2050, generating between 4.5 to 7.5 million tonnes - 1.4 to 2.3 times the current annual e-waste generation. Sachdeva also pointed out that about 25 per cent of the power produced by an average solar panel goes to waste.

Solar panel waste includes heavy metals like silver, lead and arsenic, which can be classified as hazardous waste at certain levels. Typically, this waste ends up at scrap shops, where some of it is sold and often ends up in garbage areas or dumpsites.

"It is likely that India will be faced with solar waste problems by the end of this decade, and solar waste will end up being the most prevalent form of waste in landfills soon," Sachdeva said.

Since the solar schemes are still relatively new, Sachdeva added that currently, the country lacks any policy to address the issue of solar panel waste.

Image by VD Photography.

Article written by:
Udisha Image 2
Udisha Srivastav
Processed with VSCO with a6 preset Processed with VSCO with a6 preset
Shreya Sojatia
Source: Ministry of Power, India.
Source: Ministry of Power, India.
Source: government data.
Source: government data.
Solar rooftop panels at Jayesh’s house.
© Jayesh Chhatiawala
Solar rooftop panels at Jayesh’s house.
Energific Solar’s team installing solar rooftop panels at a Delhi-based house.
© Kartik Sachdeva
Energific Solar’s team installing solar rooftop panels at a Delhi-based house.