India to Spend $900 Million on Solar

Nov 20, 2009 - Vakas Bajaj - The New York Times - Green Inc.

Indranil Mukherjee/Agence France-Presse

A worker arranges the photovoltaic cell components of a solar module panel at a factory near Bangalore.

Ending months of speculation about exactly what it was planning to do to boost the use of renewable sources of energy, India said this week that it will spend about $900 million on solar energy.

The Indian cabinet approved a plan on Thursday that sets out to increase energy production from solar technology to 20 gigawatts by 2022, up from six megawatts today. The government will spend about 43 billion rupees ($922 million) in the first of three phases of the program. The total cost for all three phases could approach $20 billion.

The government had signaled its intention to invest more heavily in solar technology earlier this year, but had been reluctant to share details. Its latest announcement comes less than three weeks before world leaders are set to meet at Copenhagen to discuss climate change.

Though Indian policy makers have softened their tone on the meeting, they are adamant that they will not agree to any mandated reductions in emissions and have said any targets should be calculated on a per capita basis, something that the United States and other Western powers have resisted.

While India’s stated target for solar power appears ambitious — the United States had nine gigawatts of solar energy capacity at the end of last year — there is significant skepticism about whether the country can meet that target.

India has been very slow to add conventional electricity generating capacity. Government officials estimate that they will fall 20 percent short of their target for new power capacity for the five years that end in 2012. Many Indians have only intermittent power and most industrial users build their own captive power plants to ensure that they have a continuous supply of electricity.

Another big challenge will be reducing the cost of solar power to make it relatively competitive with coal, which is India’s main fuel for power plants. In India, power produced by solar cells costs about 2 and a half times as much as power from coal. The Indian government will likely have to subsidize makers of solar equipment for some time if it wants to achieve its target. The country already subsidies fuels like diesel, kerosene and petroleum for drivers and household use.