Investment and skills bottlenecks need to be addressed if India is to hit true potential warns World Bank
India could become a global leader in the development of solar power provided the government acts now to make it easier for developers to invest in the industry, says the World Bank.
A report published today says a lack of access to low cost financing, poor infrastructure and a lack of access to raw materials is holding a fast-growing sector from hitting its potential.
Specifically it says federal and state governments should back financing instruments that can take the risk out of investments, enabling the country to hit its 20GW solar target by 2022.
“While India is clearly emerging as a global leader in the area of solar power, to achieve its target of adding 20,000 MW of solar capacity by 2022, it needs to address the key barriers and constraints that could come in the way of scaling up the solar program,” Onno Ruhl, World Bank country director said in a statement.
Since 2010 the country’s total installed solar capacity has soared from 30 MW to more than 2,000 MW, with the national solar strategy – named the Jawaharlal Nehru National Solar Mission Phase 1 (JNNSM) – responsible for 500MW.
The World Bank reserved particular praise for the state of Gujarat, which it praised as a “forerunner in solar capacity addition”.
Gujarat boasts Asia’s largest solar park located in Charanka, constituting over 500 MW of multi-investor, multi-technology solar capacity.
It also plans to construct a 10km solar plant over waterways in the Narmada Valley, which will slow evaporation and generate 10MW.
“Building on the success of Phase 1, the program now needs to focus on promoting financing of solar projects by commercial banks, developing shared infrastructure facilities such as solar parks and identifying comparative advantage of Indian manufacturing across the supply chain”, said Ashish Khanna, lead energy specialist and one of the authors of the report.
India faces the twin challenges of delivering energy to millions of off-grid rural villagers while cutting its greenhouse gas emissions.
The country is currently the world’s seventh largest emitter of global warming pollution and fifth largest for emissions from fossil fuel combustion.
At the 2009 UN talks in Copenhagen the government committed to cutting emissions per unit of its GDP by 20-25% by 2020 over 2005 levels.
In August the government announced it had set aside US$7.9 billion to create a ‘green energy corridor’ to facilitate the flow of renewable energy into its grid electricity.