Solar Mission and Plans for India – Incentives and Regulations

By Narsi Santhanam • Sep 25th, 2009 • Category: Uncategorized

India is soon going to embark on national solar mission in a big way. Considering that the country presently generates less than 10 MW, the target of 100,000 MW by 2030.

Indian Solar Energy Mission has two major components: solar power generation and manufacture of equipment to achieve it. India’s capacity to generate solar power is negligible now: less than 10 megawatts (MW). The mission aims at 20,000 MW by 2020. Thereafter, it would aim at producing a tenth of the country’s power from solar.This would amount to 100,000 MW by 2030.

Incentives

Under regulatory incentives, power supply firms will have to purchase a portion of their power from solar sources.

Under the fiscal incentives, the solar power generators supplying to the grid (utility scale plants) will be entitled to tax cuts and exemption from customs and excise duties. The mission details a funding roadmap. Its calculations rely on certain assumptions: it expects costs of creating the infrastructure to drop from Rs 20 crore per MW now to Rs 6-8 crore per MW by 2020.

It anticipates a gradual drop in the tariffs for solar power generation – from the current Rs 18 per kilowatt hour (kWh) to Rs 5.6 per kWh by 2020. As the tariff falls, the fixed incentive would also be reduced. By 2020, solar power generation cost is expected to decrease to levels of all other energy sources, which are expected to increase at an average rate of 3 per cent per annum (they are Rs 3-5 per kWh now).

About the Author

Narasimhan (Narsi) has extensive experience in understanding renewable energy markets and strategic levers for success in these markets. His special focus has been his work on the Indian renewable energy industry. His work in the previous 15 years have spanned market and industry research, product management and international sales, and strategic consulting. see more http://www.eai.in/ref/team/ns.html

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