Prime Minister Manmohan Singh on Monday called for the creation of Solar Valleys, research and manufacturing hubs that will hopefully put India ahead in the next great wave of technological innovation—just as Silicon Valley put the US ahead of the other countries in the information technology wave of the 1990s.
Energy-starved India plans to generate at least 20,000MW of solar power by 2022, a target that’ll help the nation meet its stated goal of cutting down the emissions intensity of the economy as well as its dependence on traditional fuels that are currently sourced from abroad.
Solar energy is the flavour of the season. China and the US—the world’s two largest producers—have already announced plans to build 2 gigawatts of solar capacity each. India’s ambitions are quite modest by comparison.
But that should not be a worry. Innovation is not so much about scale as it is about smart ideas. There are two main challenges to be met before solar energy becomes a viable part of our national strategy. One, it is still not clear which of the current technologies—crystalline silicon, thin film or solar concentrators—will win the day. Two, the cost of solar energy has been falling, but it is still way too expensive compared with traditional energy based on coal. The government should neither pick winners nor offer subsidies at this juncture.
The Solar Valleys should be crucibles of innovation led by the private sector and backed by fundamental research and venture funding, rather than magnets of government subsidy.
The government has proposed a Rs24,000 crore subsidy for solar power over 20 years. It might be more productive to look at the example of Denmark, which taxes conventional fuels and then channels the benefits to industry and consumers so that they have incentives to use clean energy. Such a model in India would not only make solar power cheaper to use, it would also attract industrial interest in a relatively new field with considerable business opportunities.
However, the issue of taxing fuels is a political minefield in India. Bureaucratic meddling is another threat. If India’s past record in implementing big-ticket projects is anything to go by, then there is a real threat of the solar mission coming to naught.
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