For a tropical as well as a religious nation like India, the sun has been an object of extreme reverence. However, it is only now that the country is looking at this inexhaustible source to meet its energy demands. Although the country's first solar power project was commissioned in the late 1980s, the progress till very recently was sporadic and insignificant. Much of the sun's energy was harnessed through solar-powered devices like solar lanterns, cookers, water heaters and other such devices. Solar power was seen in a very informal manner and only found applications in non-electrified or under-electrified rural habitations. In a commercial sense, grid-connected megawatt-sized solar power plants is the most optimum way to harness solar energy, and in this direction, India has made scant progress. Up to March 2009, India's grid-connected solar power capacity was a meagre 2.12 mw with first grid-connected (non-demonstrational) solar power plant coming up only in 2003. Efforts picked up momentum only in 2009 when in only six months, 7 mw of grid-connected capacity was added taking the cumulative total to 9.13 mw as of December 2009.

Speaking of solar potential, India is hugely endowed. It is estimated that solar power plants set up on just 5 per cent of land covering the Thar Desert can meet the country's entire energy demand. Technically, the solar power potential in India is estimated at a very significant 50 mw per sqkm. In most parts of India, clear sunny weather is experienced for 250 to 300 days in a year. The annual radiation, according to available estimates, ranges from 1,600 to 2,200 kwh per cubic metres. In terms of energy, this is equivalent to an abundant 6,000 million Gwh per year. For a frame of reference, India's total electricity generation in 2009-10 was 770 million Gwh. Annual solar radiation is found to be the maximum Rajasthan, northern Gujarat and parts of the Ladakh region. Parts of Andhra Pradesh, Maharashtra and Madhya Pradesh also score high on this count. In fact, India generally receives more radiation than Japan, Europe and USA where the solar energy industry is highly developed.

The turning point: The announcement of the much-awaited Jawaharlal Nehru National Solar Mission (JNNSM) in January this year is construed as India's biggest and most formal attempt to tap the huge solar power potential. The mission (See Box) has aimed at having 1,100 mw of grid-connected solar power capacity by 2013, which represents the first phase of the mission. On July 25, the power ministry and the ministry of new and renewable energy jointly issued guidelines for selection of private sector developers. One of the interesting features of these guidelines is the concept of "bundling" of power that aims to offset the high generation cost of solar-based electricity, thereby making capitalintensive solar power projects more attractive. The bundling scheme that will be in force for the first phase of JNNSM will work as follows.

For each mw of installed capacity of solar power for which a PPA is signed by NVVN with solar power producers, the Union power ministry shall allocate to NVVN an equivalent amount of mw capacity from the unallocated quota of NTPC coal-based stations and NVVN will supply this "bundled" power to the distribution utilities. NVVN (NTPC Vidyut Vyapar Nigam Ltd) is the designated nodal agency forprocuring the solar power by entering into a power purchase agreement with developers. This scheme is applicable to those project developers who will be setting up their solar power projects before March 2013 and which are grid-connected at 33kV or above. NVVN, it may be mentioned, is also the agency responsible for selection of developers.

procuring the solar power by entering into a power purchase agreement with developers. This scheme is applicable to those project developers who will be setting up their solar power projects before March 2013 and which are grid-connected at 33kV or above. NVVN, it may be mentioned, is also the agency responsible for selection of developers.

Evolution of grid-connected capacity:
India's efforts to set up grid-connected solar power capacity began as small demonstration projects. According to information available with Electrical Monitor, Punjab was host to the country's early demonstration projects. In October 1999, two tiny projects, each of 50 kw (or 0.05 mw), were set up by the Union ministry of new and renewable energy, then known as ministry of non-conventional energy sources. The projects were established at Mini Secretariat Building and Village Bajak in Punjab, and are currently in operation.

In March 2003, a 0.2-mw grid-connected solar power plant (based on photovoltaic technology) was installed in Khatkar Kalan village of Punjab's Nawashahr district. This plant was then India's biggest grid-connected solar power plant. Constructed by Tata BP Solar, the plant was deployed to illuminate 100 street lights on the road leading to the Shaheed-e-Azam Bhagat Singh Museum.

The paradigm shift came in November last year, when West Bengal Green Energy Development, a state government undertaking, commissioned a solar photovoltaic grid connected plant at Jamuria in West Bengal. This is believed to be India's first utilityscale grid-connected solar power plant. Built by Hyderabad-based Titan Energy Systems Ltd, the facility with capacity of little over 1 mw supplies power to state government utility Dishergarh Power Supply Company.

Karnataka has taken major strides by commissioning two grid-connected facilities of 3-mw each, both supplied by Titan Energy. The first, at Itnal in Belgaum district, was commissioned in December 2009 followed by another at Yelasandra in Kolar district in March this year.

The cost factor: The biggest challenge in setting up solar power capacity is the very high capital cost. Solar energy is arguably the costliest when compared to any other form of power generation—conventional or non-conventional. It is currently estimated that a solar power plant based on photovoltaic technology would cost Rs.17 crore per mw while the solar thermal variant would involve capital expenditure of Rs.13 crore per mw. Even if one takes an average cost of Rs.15 crore per mw, it is thrice the cost of setting up a conventional coal-fired plant or a wind power project.

In terms of maintenance, solar plants based on photovoltaic technology are cheaper with O&M costs currently estimated at Rs.9 lakh per mw per year. The solar thermal type would need around Rs.13 lakh per mw per year during its operative life.

Cost of generation is proportionately high, currently averaging at over Rs.16 per kwh. Under JNNSM, Central Electricity Regulatory Commission has fixed the rate of Rs.17.91 per kwh for solar photovoltaic and Rs.15.31 per kwh for solar thermal power projects. The rates, relating to fiscal year 2010-11, will be applicable for solar photovoltaic projects commissioned by March 2012 and solar thermal projects commissioned by March 2013.

Lack of domestic equipment base:
Renewable energy in India has largely remained a private sector subject, and solar power would be no exception. There has been tremendous response so far from solar power developers both from India and abroad to set up solar power plants. The incentive scheme announced the government has of course been the principal attraction. One of the biggest challenges that India would face is the availability of solar equipment. Currently, India's solar power equipment industry is at its nascence; there would hence be intense reliance on imported equipment. As some industry experts say, international suppliers would be interested in the India only when there is a sufficiently large market in terms of planned power capacity. Till the JNNSM was announced, the plans for solar power projects were only sporadic and hence the interest of foreign equipment manufacturers was limited. With the JNNSM setting out a national objective, the market has expanded tremendously, at least in principle. JNNSM reflects India's seriousness of solar power objectives and will instill confidence amongst foreign suppliers. Once solar power capacity gets gradually built in India with imported equipment, it would gradually result in the growth of domestic solar equipment capabilities.

US-headquartered SEMI, the global industry association representing semiconductor, micro-electric and photovoltaic segment, sees India emerging as a hub of solar photovoltaic product manufacture supporting local consumption and even some of the markets abroad.

The President and CEO of SEMI, Stanley T. Myers, recently said the recent announcement of National Solar Mission and other support decisions will encourage domestic companies to tap this opportunity. Scores of global manufacturers are also looking to India to potentially partner and support the India's growth story in the solar power generation.

Currently, the solar photovoltaic manufacturing base is very small in India, Myers said, but it will not be too long before Indian companies play a larger role not only in the domestic market but also in supporting projects in Europe and other parts of the world.

China has become the largest manufacturer of solar PV products supporting requirements in Europe and the US, European production followed by Taiwan and Japan. Some countries in the South East Asia such as Indonesia, the Philippines and Malaysia have also begun to manufacture and supply solar PV panels, Myers said.

For multinationals equipment makers to enter India, they should see huge business opportunities that so far did not exist. However, the announcement of JNNSM, along with other incentives and guidelines, has considerably opened up the business opportunity area in India, an industry expert said.

The high-potential solar power market has substantially enthused private enterprise. According to ProjectsToday, new capacity of over 2,400 mw is currently in the offing—comprising both projects planned and those under construction. Most of this capacity—coming from over 100 projects both solar photovoltaic and solar thermal—is scheduled to commission by 2013, going by current plans. Major solar projects, in terms of capacity, are coming up mainly in Gujarat followed by Andhra Pradesh and Maharashtra.

Challenges and course ahead: India's journey to the sun has just started. It will be a long way till gridconnected solar power becomes an activity of respectable stature. The national solar mission is indeed a very important first step, it must be accepted. From 9 mw now, India aspires to attain solar gridconnected power capacity of 1,100 mw by 2013, which, prima facie, looks like a quantum leap. However, it is technically possible as solar power projects— photovoltaic or solar thermal—do not have a long gestation period, and the incentives currently offered can galvanise private enterprise.

Even though domestic manufacturing capacity is low, there are international suppliers that are willing to supply to this huge Indian solar market. Further, capital costs of solar equipment, photovoltaic cells, have been showing a receding trend. Over the past decade, prices of photovoltaic cells have dropped over 20 per cent. According to data available with Solarbuzz, retail prices of photovoltaic cells in the US market have dropped from $5.40 per watt in December 2001 to around $4.20 per watt in July 2010. Prices in the European market too have shown the same trend.

Regarding the India's long-term objective of attaining 20,000 mw of solar power capacity by 2022, there are some reservations, although the first-phase objective seems attainable. According to James Abraham, Managing Director and CEO, SunBorne Energy, the first 1,000 mw expected in the next 3-4 years will happen because there are enough subsidies, government policies and framework to support it. The subsequent phases will still government subsidy (even if capital costs are brought down) and nobody yet knows the appetite of the government with regards to subsidy in the second phase.

The deciding factor, Abraham feels, is ultimately the capital cost of solar power projects. If costs can be brought down to Rs.6-7 crore per mw, the JNNSM target is indeed small and more than that could be attained. However, if costs do not come down to the stated level, attaining the target would be difficult. In summary, Abraham feels, it is the capital costs of solar power projects that will be the principal determinant. Sunborne Energy, incidentally, has planned to set up 700 mw of solar power capacity in India by 2018. Its first plant in India would be set up at a capital cost that is at least 20 per cent lower than a comparable plant anywhere in the world, Abraham feels.

Epilogue: As of now, the Indian solar industry is in the grip of euphoric excitement. Guidelines, national objectives and lucrative incentives have spawned widespread interest amongst Indian and international solar power developers. Prima facie, the target of 1 GW by 2013 looks attainable and will put India on the world solar map. However, what will really drive India's solar ambitions would be the government's stance on the subsidy structure, the country's ability to create a local manufacturing base for solar power equipment and technology advancements in the global market aimed at bringing down solar equipment costs. What course the solar industry takes would be known only with time, but at least India has taken its first step into the sunshine.