Developing countries, in particular, face situations of limited energy resources, especially the provision

of electricity in rural areas, and there is an urgent need to address this constraint to social and
economic development. India faces a significant gap between electricity demand and supply. Demand
is increasing at a very rapid rate compared to the supply. According to the World Bank, roughly 40
percent of residences in India are without electricity. In addition, blackouts are a common occurrence
throughout the country’s main cities. The World Bank also reports that one-third of Indian businesses
believe that unreliable electricity is one of their primary impediments to doing business. In addition,
coal shortages are further straining power generation capabilities.

In order to meet the situation, a number of options are considered.

Power generation using freely available solar energy is one such
option.

India is endowed with rich solar energy resource. The average

 PPT info-snippets on
intensity of solar radiation received on India is 200 MW/km square India Trends
(megawatt per kilometer square). With a geographical area of  Buy the Green Energy in
3.287 million km square, this amounts to 657.4 million MW. India PPT
 Water in India PPT
However, 87.5% of the land is used for agriculture, forests, fallow
 Electricity in India PPT
lands, etc., 6.7% for housing, industry, etc., and 5.8% is either  Solar Power in India
barren, snow bound, or generally inhabitable. Thus, only 12.5% of  Solar Radiation Map of
the land area amounting to 0.413 million km square can, in India in PPT
theory, be used for solar energy installations. Even if 10% of this
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area can be used, the available solar energy would be 8 million
living in India. 
MW, which is equivalent to 5 909 mtoe (million tons of oil
equivalent) per year.

India has a vast potential for renewable energy sources, especially in areas such as solar power,
biomass and wind power. The current installed capacity of renewable energy is around 92204 MW,
constituting about 7.3 percent of India’s total installed generation capacity. India is already the fourth
largest in the world in terms of wind energy installations and we are seeing significant investment
activity in this area. Technological breakthroughs for cost-effective photovoltaic technology could
generate a quantum leap in the renewable energy sector since India is well endowed with solar
isolation (average of 6 kwh/ sq.mt./day).

India just had 2.12 megawatts of grid-connected solar generation capacity. As part of the National
Solar Mission, the ministry aims to bolster the annual photovoltaic production to at least 1,000
megawatts a year by 2017. With an installed capacity of 123 GW, the country currently faces energy
shortage of 8 percent and a peak demand shortage of 11.6 percent. In order to sustain a growth rate
of 8 percent, it is estimated36 that the power generation capacity in India would have to increase to
306 GW in the next ten years which is 2.5 times current levels.

Why Solar Energy? 

Fig. Global Solar Radiant Exposure over the Year.

From the above fig, it is clear that India has high solar incidence throughout the year.
It can be seen from Fig that Rajasthan, Gujarat, west Madhya Pradesh and north Maharashtra receive
more than 3000 to 3200 hours of bright sunshine in a year. Over 2600 to 2800 hours of bright
sunshine are available over the rest of the country, except Kerala, the north-eastern states, and
Jammu and Kashmir where they are appreciably lower.

During monsoon (June – August), a significant decrease in sunshine occurs over the whole country
except Jammu and Kashmir where the maximum duration of sunshine occurs in June and July, and
minimum in January due to its location. The north-eastern states and south-east peninsula also
receive relatively less sunshine during October and November due to the north-east monsoons. As far
as the availability of global solar radiation is concerned, more than 2000 kWh/m2-year are received
over Rajasthan and Gujarat, while east Bihar, North West Bengal and the north-eastern states receive
less than 1700 kWh/m2-year. The availability of diffuse solar radiation varies widely in the country.
The annual pattern shows a minimum of 740 kWh/m2-year over Rajasthan increasing eastwards to
840 kWh/m2-year in the north-eastern states, and south wards to 920 kWh/m2-year.

- A huge market for solar energy; given the high solar incidence in India (there are about 300 clear
sunny days in a year in most parts of India and the daily average solar energy incident over India
varies from 4-7 kWh/m2.

- Government’s support in form of subsidy.

- The government has envisaged a capacity addition of around 107,000 MW5 by 2012

- The government has with it several new proposals with investments running into billions of dollars
for permission to set up manufacturing facilities and requests for concessions under the
Semiconductor Policy and Special Incentives Package Scheme announced two years ago. These
proposals are now in limbo and are likely to be considered only after a new government is in place.

- Banks and lending institutions have (concessional) loans for people for establishing solar energy
products.

- The Thar Desert in India is also a promising location for a solar energy.

- Private investors have put up nearly $20 billion build plants in India to make photovoltaic cells and
panels. Some are seeking federal and local subsidies and other concessions under a national program
to promote solar manufacturing. One of the projects announced - Signet Solar - is backed by EDA
industry veteran Prabhu Goel.

- Government officials concede that the cost of generating power through large solar energy
installations faces high initial start-up costs. The federal ministry for new and renewable energy has
already funded 33 grid-interactive solar photovoltaic power plants with a total capacity of 2.125
megawatts.

- Even the hours of sunshine in Spain can by no means compete with, for instance, the State of
Rajasthan in India. This State, with between 1800 and 2200 hours of sun each year, is putting
together a plan to develop at least 50 MW of PV power plants.
Limitations:

1. The companies may find it tough to sell solar energy in the domestic market as the cost of
producing solar energy is high. The cost of production ranges from Rs 15 to Rs 30 per unit compared
to around Rs 2 to Rs 6 per unit for thermal energy.

2. The energy collected by 1 m square of a solar collector in a day is approximately equal to that
released by burning 1 kg of coal or 1/2 litres of kerosene. Thus, large areas are needed for collection.
Besides, the efficiency of conversion of solar energy to useful energy is low.

3. The serious fall in global demand for PV modules, and the rapid expansion of the more than 400
module manufacturers worldwide, is putting module prices under pressure. Oversupply, coupled with
the global financial crisis, is hitting the solar industry hard.

4. Banks are highly hesitant to finance new projects and developers are waiting for better returns in a
climate of decreasing module prices. On top of that comes the worsened dollar-euro ratio. The result
is that exports to Europe will collapse.

5. At the same time, their current investments in capacity expansion require high levels of cash. In
maintaining their cash flow, they will encounter fierce competition with all the Chinese companies also
desperate for cash flow. With only a tiny domestic market, around 2.5 MW in 2008, the Indian PV
industry is in a dangerous position. It needs the funds for expansion, but lacks sufficient sales to
Europe in a market climate of rapidly decreasing prices.

Conclusion:

The country should support its solar energy cell industry, as the climate is conducive, there is a high
dependence on foreign oil, and there is an opportunity for innovation in the solar cell process and very
high domestic demand with relatively low capital requirements. Another possible solution to develop
the Indian solar market is to set up, or stimulate, new solar funds to guarantee project financing.