Aided by its briskly improving economic position, India has been able to further its growth and expansion with policy based action and guidance from the government. For the advancement and progress to trickle down to the last mile, there will be a need for continuous demand in energy supply, which can power up the growth and possibly fast track it too. For the fruits of digitization as well as initiatives like e-governance to percolate to end consumers, the need arises for 24×7 power supply. The same logic also holds true for businesses, because to function unhindered and efficiently, they will need continued access to mission critical data and therefore ensuring uninterrupted energy supply is non-negotiable for their growth.
India is the world’s third largest producer of electricity, generating a capacity of about 256GW. Despite this, our power demand far outstrips supply and the per capita consumption of electricity in our country is abysmally low. Consequently, India faces a power deficit situation, and hence the demand for alternative sources of energy is increasing rapidly. With an ambitious plan of generating 100GW of solar energy by 2022, the country thus represents a huge opportunity for global green-energy focused firms who are scouting to invest in the India story. What also aids their search is the reprioritisation of renewable energy sources on to the top of the national energy security agenda by the NDA led government.
Renewable and Solar Energy – The Indian Picture
With an increasing demand-supply gap in energy, the government and majority of businesses are now taking crucial steps towards tapping the solar potential of the country, thereby helping achieve India’s goal of becoming a country that provides energy to all.
In this light, India looks at achieving its gargantuan (yet seemingly possible) target of 100 GW of renewable energy by 2022, the government has put in place an elaborate ecosystem to support green and renewable energy ventures. The government’s announcement has already seen a majority of domestic companies capitalising and looking at adding significant green energy capacities to their prowess. This is another significant reason as to why the share of solar and renewable energy capacities is set to rise soon.
While this push will help India reduce its dependence on fossil fuels and curb pollution, India’s solar push faces hurdles such as affordability and insufficient infrastructure. Speaking of affordability, assuming that there are high tax returns that will be levied on equity, the cost of generation from a solar project can be very expensive and reduce the interest of companies looking to invest in such ventures. Until now the industry has been well supported by government incentives like lower duties, tax breaks and guaranteed purchases by the state utilities. But some companies bundle solar energy with large volumes of conventional energy, which results in a marginal rise in tariffs for the end user. This raises an important question on the affordability part. Another challenge in the quest for enhancing the solar energy production is that of inadequate infrastructure facilities, which becomes a hindrance in the adoption of solar-based technologies. With the existing transmission capacities being insufficient, we are witnessing a lot of inter-state transmission congestion, and a lot of this goes unaccounted for. This has additionally raised an important question as to whether India as a country can provide the required infrastructure for the adoption of solar energy.
Increasing Use and Benefits of Solar Energy, Products and Solutions
While India’s solar push does face some grave challenges, solar energy does have some real advantages. The first one being abundance of solar energy in India. Being a tropical country, solar energy is produced on a large scale in India. India saw a 14.2% increase in solar power generation from 2013-2015.
From a business standpoint companies today are looking to go green and reduce their carbon footprint.This is why, we are already witnessing a huge surge in demand for solar inverters and UPS systems that are cost efficient and effective. The surge in deployment of such solutions is accelerating the pace of growth in the global power electronics market, a critical segment for the solar industry supply chain.An interesting point to note is, although the average price for conventional solar inverters declined by 16% last year, the power electronics industry reported significant revenue growth during the same period. This has resulted in the power electronics market catering to the solar industry growing by nearly one third year over year to about half a billion dollars in 2014.
With demand for Micro Inverters, UPS systems and power optimisers projected to be among the hottest of the lot in terms of growth, the estimated global market for these products is also set to grow 19% annually over the next four years, reaching more than $1 billion in 2019, according to a recent study by IHS Technology’s PV Inverter Intelligence Service. Companies making solar panels or modules are increasingly embracing micro inverters, power optimisers and UPS solutions to differentiate themselves from competitors and expand the options they can offer their customers.This has also seen many companies including Emerson Network Power invest in central inverters and the off grid solar market in a huge way.
The Way Forward and the Future
With the government highlighting their openness for large scale PPP initiatives as well as huge solar projects, there is still an increasing need to come out with encouraging policies. Solar panels reduce the amount of electricity coming from fossil fuels, supplying business operations options of clean, renewable energy. Many business owners, from hotels to wineries to retail stores, to manufacturing units are making the decision to reduce their electricity bills by adopting the cleaner and greener option of solar energy. With major tax benefits especially carbon credits on offer, having an environment-friendly image seems a profitable business proposition too. It is safe to say that many organisations and even state governments are excited about the prospects of solar energy, which is evident from research and development conducted for solar/ green cities. A total of 60 cities/towns are proposed to be supported for development as Solar Cities during the 11th Plan period. With the country expecting an investment outlay of about $250 billion (` 1,52,500 crore) in the electricity and renewable energy sector by 2019, the outlook is indeed sunny (pun intended!) for India.
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