FOREIGN INVESTORS FUELING A SOLAR ENERGY BOOM IN INDIA.
Azure Power is just one of the companies developing solar power in India
There are about 300 clear and sunny days in India each year. And
with its location very close to the equator, the country is one of the top
countries in the world with the capacity to produce among the largest solar
power generation. However, with the country relying mostly on coal-generated
power, hundreds of villages still do not have access to electricity and many
major cities are still experiencing rotating blackouts.
But all of these
are about to change under the government’s latest push to produce more solar
parks across all states of the country. Indian Prime Minister Narendra Modi has
created a 15-year plan with the country’s target solar power energy production
of 100 gigawatts by the year 2020.
Currently, the
plan includes the creation of an electricity act wherein the use of
solar-powered applications and equipment are to be made compulsory in all
government buildings, as well as hotels and hospitals. The plan also consists
of the government taking care of land rights and evacuation issues with the
creation of solar parks.
Adding 40
gigawatts of rooftop solar powers from private homes and commercial buildings
are also included in the plan. Currently, there are only 350 megawatts of solar
power installed under this category, but the early stages of implementation
have already begun.
In order to
achieve the 100 gigawatts target, the Indian government needs to have an
investment of $1 billion US dollars for every 1 gigawatts of solar power, which
means a total of $100 billion is needed to cover the massive project.
While the
government has its own financial program on the 15-year plan, its current
initiative to provide electricity to 300 million homes in the country, as well
as to reduce its damaging pollution levels, are attracting a string of potential
foreign investors.
India’s solar
power-friendly government is 100% open to foreign investment on the project,
and offering a series of tax breaks to these investors. India has a large
potential to be the world’s leading solar market, projected to come only next
to China and the United States in terms of solar energy production.
Among these
investors include Japan’s SoftBanc, which is a multinational telecommunication
giant and Taiwan’s Foxconn, which is a large electronics manufacturing company.
Together with
India’s Bharti Enterprises, which is a building conglomerate, the 3 private
companies have joined together to create a 3-way venture to invest a total of
$20 billion US dollars for the development of solar parks in the southern
Indian state of Andhra Pradesh.
This is a major
boost to Prime Minister Modi’s plan, making his target a near reality with a
projected 50% completion in the next 7 years. Among the challenges of this
solar project is the lack of land for solar parks, which has caused a hindrance
on Modi’s previous plans. About 4-5 acres of land is needed for at least 1
megawatts of solar power production. The lack of grid infrastructure is also
another challenge for this project, but the Indian government is gradually
overcoming these challenges to attract more foreign investors.
India is
currently the world’s 3rd largest polluter of carbon emissions. With the
possibility of the project seen to be on the horizon, foreign investors and
private Indian companies are also seen to be critical for the government to
meet its grand solar target.
Credit: Gordon Smith.
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