Solar in the Twenties
By James Abraham
Founder and Director – SolarArise
It’s 2020! A whole new decade of possibilities! Our solar industry starts this decade at global scale, courted by players from around the world. We started the last one as a fledgling infant.
A decade ago, the National Solar Mission had been launched, with an ambitious target of 22GW by 2022. At the time, India had a total installed capacity of a few megawatts (MW’s), and solar power was about five times as expensive as conventional power. The target of 22GW’s seemed ridiculous. In fact, many of us were ridiculed for entering this questionable sector, with warnings that our careers were being risked for a fantasy.
In the early days, government’s commitment was in question. The state of Gujarat and the Ministry of New and Renewable Energy were pioneers. They established transparent processes for allocating projects that has encouraged new entrepreneurship and investment.
In the early days, we knew little about this technology. We learned the difference between indirect and direct sunlight, the impact of latitude, the innovations in structure design, the importance of maintenance, and the skills our workforce needed. From scales of 10 to 20 MW’s, we learned to build and operate some of the largest plants in the world.
In the early days, solar power was very expensive. Yes, the fall in solar panel costs certainly helped. But just as important were the engineering and cost improvements in the balance of systems. That has made India’s installations the lowest cost in the world, and solar power is now at par or lower than conventional power.
In the early days, there was skepticism about the distribution companies’ health to pay. Sadly, that continues today. Yet, challenges by the discoms are few, and are usually squashed in favour of the rule of law.
In the early days, there was great doubt whether we could raise the financing necessary. Indian banks stepped in with debt and have recognized that solar plants are the best performing assets on their books. Funding from around the world flooded in, as investors realized the returns and scale in solar.
Today, with about 30GW’s installed, our tariffs have fallen below Rs. 3/kWh. And the cynics have been silenced, or at least muted for now.
But this is just the beginning. Looking into the twenties, solar is no longer a fledgling, marginal option. Today, we stand at the brink of re-configuring the power industry. The opportunities are obvious. With solar, India can finally chart a path of development that doesn’t destroy the environment. We can be an example for every country that is yet to embark on growth. Clean power can reach everywhere. New technologies such as high-efficiency cells, storage, and tracking can further reduce the cost and deliver power across a 24-hour day, to every part of India. And data-science can help create better integration without destabilizing the grid. It’s a golden age for solar and India. But it will not be a easy because we will be challenged.
One of the biggest challenges is the entrenched, conventional industry. Discoms continue to suffer from weak financials and are burdened with long-term PPA’s with coal plants that are no longer viable. The coal industry employs hundreds of thousands of people as it enters a period of decline. The coal-power plants, which still supply most of the power in India, are increasingly unviable, straining investors and bankers. And the upgrades to the grid need to be done faster than ever before to integrate all the new sources and demands for power.
Our industry can offer low-cost, reliable, clean power, but it is contingent on an expensive and immediate transition away from coal power. Don’t expect this to be easy. While the twenties is our decade of opportunity, expect a lot of headwinds.
Look at the solar panel safeguard duty. Veiled in the argument of supporting domestic panel manufacturers, it actually supports conventional power by keeping tariffs inflated. And now the PMO is considering eliminating the carbon tax on coal to further prop up that industry.
Meanwhile, the states have virtually eliminated open-access options, removing the consumer’s choice and leaving us all dependent on the discom and conventional power. Expect more such headwinds.
If we are to realise clean power for everyone, we need to transition away from conventional power. That will be costly and will require real vision and leadership.
We have dreams of 175GW or 450GW of renewables. We have dreams of a country growing without destroying the environment. We have dreams of clean power reaching everywhere, and clean air for everyone.
As we start this decade, all these dreams look possible. But these first few years will not be easy.
