Building Competitive Green Industries

Figure 4.9. Areas for government support identified by clean technology SMEs in India35%32%30%25%28%26%24% 24%Percent of firms20%15%10%5%20%18%8%6%4%0%Direct subsidiesRegulatory reformR&D grantsLoan guarantees /discountsImproved enforcement /compliance mechanismsTax creditsFeed-in tariffsMarket supportProcurementBusiness mentoring /commercial adviceSource: Survey of clean technology firms in India undertaken in July and August 2013.ConclusionThe clean technology market is set to grow in India.Over the next decade, economic growth will bebolstered by India’s large population, peaking laborforce participation rate, increasingly educatedand skilled workforce, and the emergence of awealthier and more urban middle class.Significant investment in solar power, whichis especially well suited to India’s climate andgeography, is being driven by the National SolarMission, the feed-in tariff and falling technologycosts. The SME opportunity in on-grid solar PV andCSP technologies over the next decade is about$41 billion, including lifetime O&M. The bulk ofthat opportunity is in the latter segments of thevalue chain: planning, installation, and balance ofsystems, and O&M. Innovation opportunities existaround customization of small systems for PV andaccelerating the time between commissioning andoperational readiness for CSP.According to surveys of clean technology SMEs inIndia, firms are optimistic about the market andare active in innovative activities. However, theyhighlight several barriers to entrepreneurshipsuch as access to finance and land. Removalof these barriers and providing targeted policysupport (for instance, loan guarantees or subsidies,marketing and sales support, and improvedaccess to technical R&D facilities) could provideopportunities for additional industry growth andSME participation.Chapter 4: Case Study: Solar Energy in India47