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India’s aspiration for minimizing the environmental cost to economic development by meeting 40% of its energy needs from non-fossil fuels by 2030 has made its nascent solar power industry the destination for global investors, creating growth opportunities for a host of businesses in the entire electricity value chain.

The massive scale-up of solar power generation capacity from 6.7 gigawatts (GW) to 100 GW by 2022—which is twice the present output of China, the world leader in solar power generation —comes as a stimulus to manufacturing equipment, panels and supply of services and technology used in the solar industry, say industry leaders.

India’s shift to a green economy through the use of different renewable energy sources will attract an investment of $140-160 billion over the next six years, out of which $100 billion will go to the solar industry, according to official estimates. More than a third of it will be in the form of equity and the remaining from domestic and overseas lenders and trade credit or development finance agencies. Many of the lenders have reworked their power sector portfolios with a strong focus on renewable energy.

According to Sanjeev Sharma, chief executive officer and managing director of power and automation technology firm ABB India, a set of factors make solar power industry in India not only an attractive business proposition but also an imperative to decouple growth from environmental impact, which is crucial to developing economies. Demand for reliable power supply, 300 sunny days in a year and the scale and range of solar power applications are some of them.

“There are a host of products and system requirements to make solar energy usable and reliable, which can spawn productivity and boost the manufacturing sector. Between the solar panel and the plug, there are several electrical components used and each is an opportunity to make quality equipment in India,” said Sharma. These include inverters, low voltage products, technology and equipment for managing solar power plants as well as its connection with the grid. Remote and on-site maintenance services for grid-connected as well as roof top solar power generators and micro-grids provide a huge opportunity for local manufacturing and supply, said Sharma.

The unmet demand for electricity in remote villages, including where grid connectivity could get delayed due to the difficult terrain, is an area where many solar power businesses are finding a role to play.

“Nearly 40 crore people in the country do not have access to electricity. There are places where the grid is very unreliable. Many people face up to 20 hours of power cut daily. In such a scenario, a conventional power back-up system (such as inverters) has little use because it also needs power to operate. Solar, on the other hand, is an alternative source of power as well as a power back-up. It is also cost-effective when compared to diesel generators, as a 10 kilo volt ampere (kva) diesel generator consumes about two liters of fuel per hour,” said Kunwer Sachdev, managing director & founder of Su-Kam Power Systems Ltd. Replacing diesel generation sets with solar or natural gas based power is one of the pillars of India’s efforts to cut carbon emissions.

Su-Kam has installed more than 50,000DC solar systems comprising solar panels, batteries and electrical appliances that run on DC in remote areas of Uttar Pradesh. The excess electricity after using the appliances is stored in the battery for later use. Households that never had access to electricity earlier now enjoy uninterrupted power, said Sachdev.

Setting up micro-grids with solar power or a combination of energy sources can help run agriculture pumps and charge e-rikshaws in remote villages as well as supply uninterrupted power to IT parks and industrial complexes, said Sharma of ABB India.

The growth in solar power industry will have a multiplier effect in a number of ways, says Santosh Kamath, partner and head of renewables, KPMG in India. “We will see a rise of storage technologies, automation systems and a widespread service industry as distributed rooftop solar projects take off. It will lead to the creation of a new ecosystem and support a vendor market for chemicals, glass and other materials used in solar manufacturing,” said Kamath.

Out of the country’s planned 100 GW solar capacity, 40 GW is to come from rooftop solar projects, 40 GW from large scale projects and 20 GW from ultra mega solar power projects (UMPPs).

Growth is aided by policy measures such as renewable power generation obligation of new coal and lignite-based thermal power plants as well as renewable power purchase obligations of power distribution companies.

Source: Livemint.com