New Delhi: India needs a renewable energy law that requires utilities to progressively buy greater amounts of electricity generated from renewable energy sources, a study released on Monday has suggested.
Policy tweaks and targeted fiscal incentives to manufacture photovoltaic cells that convert sunlight into electricity would also drive domestic adoption of this eco-friendly power source in the country, adds the report by industry lobby group India Semiconductor Association, or ISA, and management consultancy firm PricewaterhouseCoopers.
Showing the way: Solar panels at a Chhattisgarh village. The ISA study has identified rural electrification for remote villages as one of the high-potential market for solar photovoltaic cells. Maitreyee Handique / Mint
“Government support is crucial for the growth of the (solar photovoltaic) industry, and the government needs to implement policies and programmes to attract investments in the sector,” said ISA chairman Jaswinder Ahuja.
Solar cell manufacturing is also on the priority list of a state panel set up at the instance of Prime Minister Manmohan Singh to frame a national policy for the manufacturing sector.
The committee, headed by V. Krishnamurthy, chairman of the state-run National Manufacturing Competitiveness Council, or NMCC, which supported ISA’s study, submitted its report on 20 September, identifying five “strategic manufacturing sectors” that include aerospace, shipping, information technology and electronic hardware, capital goods, and solar energy.
“NMCC has been suggesting that the solar mission be given a higher level of empowerment, along the lines of India’s space mission or nuclear power initiatives,” said Krishnamurthy, who is also a member of the Prime Minister’s council on climate change.
India’s solar cell industry, which includes companies such as Tata BP Solar Ltd and Moser Baer Pvt. Ltd, produced 45MW equivalent of solar cells in the fiscal year to March 2007, the latest year for which data is available, posting a growth of 21.6% over the previous fiscal.
The ISA study has identified four high-potential markets for solar photovoltaic cells—rural electrification for remote villages (where implementing solar power is cheaper than extending the grid), backup power for telecom base towers (that currently use diesel-based backup), roof-based solar power systems for commercial buildings, and grid-connected power generation.
For conventional electricity generation, however, the report says solar photovoltaics is “not an attractive option”, citing high generation costs in comparison with fossil fuel-based power.