Can the Germans Teach the Indians?

Posted on July 1, 2011 by

India’s Jawaharlal Nehru National Solar Mission could learn a few lessons from the Germans. India’s plan to deploy 20,000 MW of solar energy by 2022 from a early double digit MW as of today will require some bold initiatives.

The key obstacle to rapid adoption and development of solar is the high capital expenditure cost. This is something that the Germans have found a way around.

A review of BP’s 60th annual energy review shows that in 2010, installed solar capacity  registered a 73% growth to reach a total of 40 GW. What is interesting is that 44% of the capacity added worldwide comes  from Germany alone. A record 7.4 GW of new capacity was added by the Germans in 2010, almost double the 3.8 GW of additions in 2009. With 17.3 GW of capacity installed by the end of 2010 Germany has 43.5% of the world’s solar capacity, more than four times its nearest rivals, Spain (3.9 GW) and Japan (3.6 GW).

Strong policy support has driven this rapid growth in Germany over the past three years. Growth in 2009 was so strong that the government accelerated the planned reduction of tariff incentives in 2010, but this still did not dampen growth. Currently, the government plans to provide a 24% subsidy on solar energy. Moreover, the feed-in-tariff laws provide a favorable environment for solar development.  The most important development that is bound to shoot up solar development in Germany is its decision to shift away from nuclear energy. This move will drive investment in solar energy and it is not far from realistic to state that Germany’s solar capacity will reach 30 GW within the next two years.

While still lagging behind, India is not without its share of schemes. Under the National Solar Mission, solar developers can avail guaranteed returns for 25 years at five times the tariff of other energy sources. Sale of solar energy is also guaranteed through the Renewable Purchase Obligation (RPO) scheme which set targets on utilities, licensees and open access consumers to meet a part of their energy requirement through solar energy. This is further complemented by additional subsidies ranging from 13% to 90%, depending upon the technology and location of the off-grid solar development.

India has tremendous potential in solar power. Places like Gujarat and Rajasthan receive about 5100 hours of sunshine annually which is ideal for harnessing solar power. The Germans have demonstrated that the integration of bold initiatives require revamps at national level to ensure that decisions can be made without any handicap (for example, the decommissioning of the nuclear power plants) to ensure proper transition to this clean source of energy.

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