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Global Reach
Given land acquisition and construction costs, as well as development lead times and environmental
impacts of conventional power generation, renewable energy in India looks all the more attractive.
Energy security and climate change are also driving India’s interest in renewables. The United
Nations estimates that the Ganges River, which provides water for drinking and irrigation for
upwards of 500 million people, may go dry by 2025 due to melting of the Himalayan glaciers that
feed it. Falling water tables, and rising sea levels that threaten low-lying cities and coastal areas
are other concerns. The fact that 90% of India’s energy needs are currently met by coal or oil is
exacerbating government concern over energy security and rising oil imports. While its
government, fearing the impact on growth, has resisted pressure to commit to formal targets for
CO 2 reduction, India is taking policy steps to improve energy efficiency and increase the share of
energy production from renewable sources. The 11th Five Year Plan (2007–2012) requires that at
last 10% of power generation come from renewable sources, and clean energy R&D is being
supported by leading research institutions including the Centre for Wind Energy Technology
(CWET), the Solar Energy Centre (SEC) and the National Institute for Renewable Energy
(NIRE), which focuses on biofuels.
According to the Cleantech Group’s 2008 report, “Cleantech Venture Capital and Private Equity
Investments in India,” cleantech venture and private equity investment in India more than
doubled between 2006 and 2007; $290 million was invested in 11 cleantech deals in 2007.
Electrical generation—primarily wind and solar—is receiving the most attention, followed by
waste and wastewater, energy storage, and transportation. While the sector is still nascent and
most cleantech investments are small, investors are expecting major growth.
As of mid-2007, of grid-interactive solar capacity, only about 2.12 megawatts was installed in 33
projects, largely due to cost: 15–30 rupees per unit versus 2–6 rupees per unit for energy from conventional
sources. Still, much of India has 250–300 days of sunshine a year, most notably in the
northern states of Gujarat and Rajasthan, which are relatively unpopulated with open land available
for solar development. Rajasthan has set aside for solar power 35,000 square kilometers (13,500
square miles) in the Thar Desert. In more populated areas, distributed generation from individual
rooftop panels is a more likely scenario, but one that will also require significant grid improvements.
Solar energy is particularly well-suited to provide energy for cooling in buildings and for industrial
processes, as cooling load demand corresponds to the sun’s intensity during the year. It is
also being used increasingly for rural electrification and for agricultural uses such as powering
irrigation pumps and dryers.
To encourage solar development, the Ministry of New and Renewable Energy (MNRE) has offered
subsidies, concessionary loans, and customs and duty exemptions on materials and components.
An Indian Renewable Energy Development Agency (IREDA) revolving fund guarantees
loans for photovoltaic systems. The Planning Commission’s Integrated Energy Policy envisions at
least 500 megawatts of conventional grid power displaced by solar by 2022. Private firms have invested
a combined $20 billion in photovoltaic development in India. (See the Semiconductors section
of this chapter).
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