Report on Renewable Energies in India

The Government of India says 50,000 MW of power can be harnessed from solar, wind and other renewable sources. In 1996, the value of the renewable energy sector was $555 million and a U-S report says solar energy is growing at 28% per annum in India, and wind at 22%. Annual sales of PV is $83 million and $278 million for wind. Grid-quality power generation from renewable energies has attained maturity in the past five years, and 7% of new additions to generating capacity will come from renewables. India plans to generate an additional 3,000 MW of grid power from renewables between 1999-2002.

India manufactures its own silicon for solar cells and 80% of wind generators (<250 MW). Import duties on solar and wind systems have dropped during the last two years, but subsidized prices for kerosene impede market penetration for renewables, especially in rural areas. The absence of after-sales service has resulted in a proliferation of non-performing systems.

India receives solar energy that is equivalent to 5,000 trillion KW per year; under clear skies, daily average solar incidence hits 7 kW/km2; the potential for solar is estimated at 20 MW/km2. Generating capacity for PV systems (1995) was 10 MW; the goal for 1997 is 35 MW and another 10 MW per year for the next 15 years. Import market share is 25% for Japan; Switzerland 15%, 10% for U-S and 10% for Britain, and 40% for other countries. In 1996, eight companies were engaged in the manufacture of solar cells, ten in PV modules and 60 in other PV systems. Production was 5 MW of solar cells and 9.36 MW of PV modules. In rural areas, where 100 million homes do not have electricity, the goal is 400,000 solar lanterns, 5,000 solar pumps and 400 village power plants.

For solar thermal, 30,000 km2 of solar collectors have been installed recently, and 420,000 solar cookers sold. There are 55 small-scale manufacturers of solar cookers and 75 companies making solar thermal energy systems. The cost of a solar DHW system (including 2 m2 collector, storage tank, pipeline, and instrumentation) is us$378, or $150/m2 for a 256-m2 area. The subsidized cost of commissioning a PV water pumping system varies between $1,350 and $12,200 with a subsidy of $4 per watt panel. A solar cooker costs between $27 and $68.

More than 350,000 PV systems, with cumulative capacity of 25 MW, are installed in India, mostly for rural telecom (42%), street lighting, PV pumps, and rural home lighting. A subsidy of $22/m2 of collector area for solar air heating/drying systems and $14/m2 for water desalination, is offered. There are 50,000 solar lanterns, 23,000 solar home lighting systems, 1,100 solar street lights, and 1,000 water pumping systems. Growth will be highest for users located under 10 km from the grid, where PV systems are most price competitive.

The potential for wind energy is 20,000 MW, or 30,000 MW with new higher-efficiency turbines. India has the third-largest wind capacity in the world, with 900 MW (1997) installed, of which 51 MW is demonstration. The target for 1997 is 1,000 MW installed, and total capacity of 3,500 MW by 2000. A Wind Power Program was initiated in 1983 to co-ordinate development of this sector in India. Denmark accounts for 60% of imports; Germany for 20%; 10% for U-S; Netherlands 5%; and 5% from other countries. Virtually all components of utility-scale wind energy systems are manufactured or assembled in India by 22 companies. Tax incentives are an important consideration, but media reports indicate that operators have made high profits from tax holidays and depreciation incentives for windfarms, and windfarms have been used as tax shelters. The cost to set up a windfarm ranges from us$925,000 to $1.25 million per MW. To encourage private investment, the government promotes Wind Energy Estates, where government helps to install, operate and maintain the

turbines in order to reduce costs for small investors. Government incentives for wind projects include a five-year tax holiday, 100% accelerated depreciation, exemption of customs duty on specified components, and a concession rate of duty of 20% on all wind energy generators.