Can solar power save India? Not unless it learns from coal

India is energy-hungry, but electricity supply is sporadic. The struggle to light India's homes and power its industries has been on for years now. And even though successive governments have been setting up new power plants year after year, the situation remains largely unchanged. The problem has worsened over the years in fact, with the gap between electricity demand and supply going up to 10.2 percent, up from 7.7 percent a year ago, according togigaom.com.The reason? There's not enough fuel to run those power plants!

India's "clumsy policies, poor management and environmental concerns" have made it difficult for the country to dig up enough fuel to keep up with its growing need for power, notes The New York Times. India largely uses coal to fuel its power plants, but the problem lies with the fact that eighty percent of India's coal production is managed by government-controlled Coal India, hampered by industry problems of weak policies and corruption.

 Can solar power save India? Not unless it learns from coal

Workers carry photovoltaic solar panels for installation at the Gujarat solar park under construction in Charanka village in Patan district of Gujarat. Reuters

India's 'coal mess' makes solar power attractive and an obvious choice. Besides that, India is a country with plenty of sun and flat, idle land that can be ideal for setting up solar power plants.

The Economist in an article points out that solar parks are also easier to build than conventional power plants. Also, "cheaper solar and pricier conventional power may soon make solar power competitive and without subsidies."

The Government has already approved plans for 54 cities to be developed as solar-powered cities andsanctions have already been granted to 39 such cities. Gujarat - a hot bed of solar power development over the past year - recently celebrated the commissioning of 600 MW of solar energy projects over a year. The state also built the world's first canal-top project on the Narmada canal that may soon become a path-breaking prototype in solving the power and water crisis that India is currently facing.

But is solar power everything its cracked up to be?

Even though India doesn't generate even a 1,000MW of solar power at present, the government is aiming for a 20 fold increase in production over the next 10 years.The biggest hurdle, however, is with the funding for solar projects in the near term. Commercial banks aren't very sure of the return scenario such projects can generate, because of lack of reliable data, high tariffs and sick state utilities.

Lack of funding for projects could make the prospect cloudy, reports CNBC-TV 18.

Also, solar power is likely to face the same infrastructural and political problems that coal is facing if is handled by the government.

Solar faces another important problem, writes The Economist. While Gujarat's state government has guaranteed high prices of 15 rupees for the first 12 years of operation to solar producers, at the national level there is a separate system.

"It relies on "reverse auctions" in which those solar producers who commit to producing power at the lowest cost win the right to operate. In the national solar auction in December 2011 however, the winning firms committed themselves to selling solar power for as little as 7.5 rupees."

And since many people doubt that it is possible to make money at these prices, who would want to invest?

Solar is the future of India and can be the magical formula we need to solve our power crisis. But one can't help but hope that it doesn't face the same fate as coal.

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Updated Date: Dec 20, 2014 09:54:37 IST