Solar Energy Industry in India

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Solar energy: The Light at the end of the tunnel?
A report submitted
to
Instructor: Prof. Mathukutty M. Monippally
Academic Associate: Ms. Nameeta Chandra
In partial fulfilment for the requirements of the course
Written Analysis and Communication

By
Rohan Arora
Section A

On
04 February 2012

INDIAN INSTITUTE OF MANAGEMENT, AHMEDABAD
Table of Contents

Executive Summary2
1.Current Energy Scenario in India4
2.Solar Energy Sector in India and its issues4
2.1.Barriers to entry5
2.2.Low acceptance6
3.Role of the government6
4.Jawaharlal Nehru National Solar Mission and its impact7
4.1Achieving a grid-connected capacity of 20GW by 20227
4.2Attaining grid parity by 20228
4.3Promoting off-grid applications of solar energy8
5.Challenges and recommendations9
Exhibits10
Bibliography15

Executive Summary

India faces a significant challenge of future energy security which is exaggerated by a growing population and a depleting reservoir of natural resources. This combined with the threat of climate change underlines the need for renewable forms of energy like wind and solar. India has been endowed with a huge solar potential (about 5000 trillion kWh/year energy is incident on its lands). But it has been unsuccessful in tapping this potential due to issues of high investments and low awareness. The Jawaharlal Nehru National Solar Mission(JNNSM) was launched in 2010 to focus on three broad objectives: achieving installed grid-capacity of 20GW, attaining grid parity and promoting off-grid solar applications by 2022. This has substantially increased investments, attracted superior technology and invigorated domestic R&D interest in the sector. But it has also scratched issues of land acquisition and undercutting due to huge discounts. The success of JNNSM now solely depends on the Government’s approach towards transparency, easier financing, viable tariffs and finally a determined vision.

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1. Current Energy Scenario in India

The current energy scenario in India presents a dismal picture with an increasing demand (of energy) and a diminishing supply (of natural resources). In 2008, 400 million people did not have access to commercial electricity and still more had an unsatisfactory access to it (The Indian Economy, 2008). Moreover there has been an accelerated energy demand to fuel India’s high GDP growth thus further worsening the situation. Coal which contributed to 53% (Figure 1) of the capacity in 2010 is neither sufficient nor environmentally sustainable (because of high carbon emissions) to meet this need. India must, therefore turn to its abundant non-conventional energy resources like wind, solar, biomass etc. for fulfilling its future demand.

Figure 1 Capacity break-up of the sources of energy (Ministry of New and Renewable Energy, 2011) 2. Solar Energy Sector in India and its issues

India is a storehouse of solar energy with most parts of the country receiving about 4-7 kWh/m2/day of solar energy (Government of India, 2010) due to its location at the Tropic of Cancer. Solar energy, apart from being environmental friendly, can be used as a decentralised source for rural electrification. However despite its advantages, India has an installed capacity of only 15MW contributing just 0.1% to the total renewable energy capacity. This abysmally low capacity can be attributed to two major issues.

Figure 2 Capacity break-up for Renewable Sources (Ministry of New and Renewable Energy, 2010) 1.
2.
3.1. Barriers to entry

There are two ways to generate electricity from solar energy: Photovoltaic(PV) and the Concentrated Solar Power(CSP) technology. PV technology is considered to be the most efficient way to generate electricity in a decentralised manner. (Ernst & Young Pvt. Ltd., 2010)

Figure 3 Manufacturing value chain for PV technology (Deutsche Bank, 2009)

Polysilicon, the raw...
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