Foreign Investors Fueling a Solar Energy Boom in India

The solar economy is having an impact around the world
The solar economy is having an impact around the world

This is Likely Just the Beginning of a Solar Energy Boom in India.

There are about 300 clear and sunny days in India each year. And with its location very close to the equator, the country is one of the top countries in the world with the capacity to produce among the largest solar power generation. However, with the country relying mostly on coal-generated power, hundreds of villages still do not have access to electricity and many major cities are still experiencing rotating blackouts.

Azure Power is just one of the companies developing solar power in India

Azure Power is just one of the companies developing solar power in India

But all of these are about to change under the government’s latest push to produce more solar parks across all states of the country. Indian Prime Minister Narendra Modi has created a 15-year plan with the country’s target solar power energy production of 100 gigawatts by the year 2020.

Currently, the plan includes the creation of an electricity act wherein the use of solar-powered applications and equipment are to be made compulsory in all government buildings, as well as hotels and hospitals. The plan also consists of the government taking care of land rights and evacuation issues with the creation of solar parks.

Adding 40 gigawatts of rooftop solar powers from private homes and commercial buildings are also included in the plan. Currently, there are only 350 megawatts of solar power installed under this category, but the early stages of implementation have already begun.

In order to achieve the 100 gigawatts target, the Indian government needs to have an investment of $1 billion US dollars for every 1 gigawatts of solar power, which means a total of $100 billion is needed to cover the massive project.

While the government has its own financial program on the 15-year plan, its current initiative to provide electricity to 300 million homes in the country, as well as to reduce its damaging pollution levels, are attracting a string of potential foreign investors.

India’s solar power-friendly government is 100% open to foreign investment on the project, and offering a series of tax breaks to these investors. India has a large potential to be the world’s leading solar market, projected to come only next to China and the United States in terms of solar energy production.

Among these investors include Japan’s SoftBanc, which is a multinational telecommunication giant and Taiwan’s Foxconn, which is a large electronics manufacturing company.

Together with India’s Bharti Enterprises, which is a building conglomerate, the 3 private companies have joined together to create a 3-way venture to invest a total of $20 billion US dollars for the development of solar parks in the southern Indian state of Andhra Pradesh.

This is a major boost to Prime Minister Modi’s plan, making his target a near reality with a projected 50% completion in the next 7 years. Among the challenges of this solar project is the lack of land for solar parks, which has caused a hindrance on Modi’s previous plans. About 4-5 acres of land is needed for at least 1 megawatts of solar power production. The lack of grid infrastructure is also another challenge for this project, but the Indian government is gradually overcoming these challenges to attract more foreign investors.

India is currently the world’s 3rd largest polluter of carbon emissions. With the possibility of the project seen to be on the horizon, foreign investors and private Indian companies are also seen to be critical for the government to meet its grand solar target.

About Gordon Smith
Gordon's expertise in the area of industrial energy efficiency and alternative energy. He is an experienced electrical engineer with a Masters degree in Alternative Energy technology. He is the co-founder of several renewable energy media sites including Solar Thermal Magazine.

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