India to Boost Solar-Power Capacity
By SAURABH CHATURVEDI
NEW DELHI--India is moving forward with plans to increase solar-power generation capacity nearly eightfold to more than 10 gigawatts by March 2017, with the government prepared to spend up to 60 billion rupees ($1.1 billion) in subsidies to reach the target.
The total cost of the program will be around 700 billion rupees ($13 billion), Ministry of New and Renewable Energy Joint Secretary Tarun Kapoor said in a recent interview.
Sam Panthaky/Agence France-Presse/Getty Images
Villagers look at solar panels during the inauguration of a solar farm at Gunthawada in Gujarat state's Banaskantha district.
The decision to move ahead with the capacity expansion, first mooted in a draft policy paper in early December, could be a shot in the arm for Indian photovoltaic cell manufacturers, but the government will also have to be mindful of potential trade dust-ups: Provision for domestically sourced solar panels to qualify for subsidies resulted in a U.S. complaint earlier this month to the World Trade Organization.
"We are in the process of finalizing the guidelines of the next phase of the solar program," Mr. Kapoor said.
Projects eligible for federal subsidies will have to submit bids detailing plans that include projected construction costs and power tariff rates, he added.
"Equipment procurement rules could be different from last time," he said, without elaborating.
The next round of bidding under the federal program could be launched in the next two to three months, he said.
The government is eager to increase the share of renewable energy--a category that in India includes power from wind and solar as well as small-scale hydroelectric projects--in its energy mix from 12% currently, as it faces recurrent power shortfalls due to inadequate supplies of coal and natural gas for thermal-power plants.
Solar power generation currently accounts for less than 1% of India's total power production--1.3 gigawatts compared with the 211 GW generated from all sources combined.
"The demand for electricity is ever-rising, and accordingly we have to expand sources of power generation," Mr. Kapoor said, adding that solar power is particularly attractive thanks to abundant availability of sunlight throughout the year in states such as Rajasthan and Gujarat.
Under India's longer-term solar-power expansion plan, the country is slated to add 20 GW of generation capacity between 2010 and 2022.
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