Sustainable Growth with a Solar Manufacturing Strategy

Context

PM Modi restated the case for greater reliance on solar power, for energy and as a path for self-reliant industrialisation, at the inauguration of a 750 MW photovoltaic project at Rewa, in Madhya Pradesh.

Our ambitious goals to achieve solar energy generation up to 100 GW by 2022, has provided China a major market for its solar PV cells and modules over the last decade but ongoing clash with China requires us to review our critical energy sector dependencies on the northern neighbour.

Background

Solar Energy is one of the renowned sectors to support the sustainability of India. Solar energy has giant potential in India due to its position in tropical belt. Solar applications in transportation, architecture, car parking, restaurants, lighting, mobile charging etc are vital for sustainable development.

Solar Energy Potential

• It is a fact not unknown to many that with 300 clear sunny days in a year and with a calculated solar energy incidence on India’s land area at about 5000 trillion kilowatt-hours (kWh) per year, the solar energy available in a single year exceeds the possible energy output of all of the fossil fuel energy reserves in India.
• So, the question is whether India is punching at its weight in terms of solar power? Indeed, by committing to upgrading its renewable energy capacity to 175 GW, of which 100GW would be solar, under the Paris Agreement, India has demonstrated its commitment to decarbonize the economy. However, with an installed solar capacity of only 33.7 GW as of December 2019, we are very far from the goal.
• Installing more than 20GW of solar power every year to achieve the goal might seem like an insurmountable task but is a viable antidote to resurrect a struggling economy post-COVID-19.
• India’s average power per capita consumption at 1,181 kWh is one of the lowest in the world.
• With an energy generation potential of 749 GW (estimates by National Institute of Solar Energy), high speed and scale (a 500 MW capacity can be constructed within 18 months while a similar thermal or hydro plant might take 2-3 times more) and lowest cost structure (India has emerged as the world’s cheapest producer of solar power with tariff’s as low as 2.44/KWh and costs of construction and financing for a new plant 14% below that of coal); solar is a viable alternative to secure India’s energy needs.
• Despite the ambitious target of solar power generation, India has an annual solar cell manufacturing capacity of about 3 GW while the average annual demand is 20GW.
• Seven of India’s top 10 module suppliers are Chinese firms. In the past five years, India has already imported $16 billion worth of solar equipment, and unless indigenous capacity is ramped up, India may import an additional $42 billion of solar equipment by 2030.
• Indian manufacturers cannot compete on cost, and many have limited access to low-cost loans highlighting the need for a strategy to ramp up solar component manufacturing under the Make-in India initiative.

International Solar Alliance

• The International Solar Alliance (ISA) was conceived as a coalition of solar-resource-rich countries (which lie either completely or partly between the Tropic of Cancer and the Tropic of Capricorn) to address their special energy needs.
• The ISA will provide a dedicated platform for cooperation among solar-resource-rich countries, through which the global community, including governments, bilateral and multilateral organizations, corporates, industry, and other stakeholders, can contribute to help achieve the common goal of increasing the use and quality of solar energy in meeting energy needs of prospective ISA member countries in a safe, convenient, affordable, equitable and sustainable manner.

Solar Equipments Industry Strategy of India

The solar equipments industry sets itself apart through its achievements on technological and economical levels. Photo-Voltaic (PV) systems based on solar modules with a 20 to 30-year lifetime are commonly referred to as solar panels. Technology and ‘minor minerals’ are the two most important locational factors for solar industry.

To scale up from its meagre 3 GW solar cell capacity, India needs a grand Make in India strategy with incentives and technological alliances with companies from Japan, Korea, Europe and USA.

Technological advances in solar PVs are generating demand for minor minerals like cadmium, selenium, tellurium and germanium which are essential for durability, enhanced electrical conductivity and for better light absorption and conversion to electricity. Minor minerals are not viable for stand-alone mining and processing, hence they need to be incentivised through tax and royalty waivers as is done by China and many European countries. Our PSUs and private companies engaged in mining, smelting and processing of coal, zinc, copper and bauxite have the technological capacity to extract these minor minerals as by-products of refining, or from waste storages. These things should be incorporated in our National Solar Manufacturing Strategy.

Job Creation in Solar industry

• Solar PV is also recognized as creating more jobs per unit of energy produced than any other energy source.
• The central government had cited job creation as a rationale for the Solar Mission.
• It is estimated that by 2022, the solar energy industry would generate as many as 1.6 million jobs with over 600,000 jobs focused on the construction vertical alone.
• Since Renewable Energy is decentralized power, there are opportunities for generating jobs in villages.
• These being jobs that require high to minimal professional skills, there is employment potential for even those with limited educational opportunities along with the professionals.

Conclusion

To become ‘Atma nirbhar’, India must withstand the temptations of short-term solutions that lock-in a fossil fuel economy for years to come, and instead focus on our strength which lies in renewables. Large scale deployment of solar will lead the economy to a sustainable, independent, and inclusive future. However, this would need bold and speedy policy actions to solve the problem of the high cost of funds, land acquisition issues, policy flip-flops by State Governments, and access to technology.

Connecting the Dot

Question for Prelims

Consider the following statements regarding International Solar Alliance (ISA):

1. The ISA was conceived as a coalition of solar-resource-rich countries to address their energy needs.

2. The ISA has 122 sun-belt countries that lie between the two tropics.

Which of the Statements given above is/are correct?

(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

Question for Mains

‘India might have a sustainable future if a vibrant solar manufacturing strategy is followed.’ Discuss.