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PROBLEM STATEMENT
To study the prospects of renewable energy with respect to solar energy in India for State
Bank of India.
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OBJECTIVES OF THE STUDY
1. To study the economic and legal policy supporting solar energy.
2. To study the prospective states for solar energy.
3. To study the upcoming technology for solar energy.
4. To suggest measures to promote solar energy in India.
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HYPOTHESIS OF THE STUDY
1. H0:- The economic and legal policy is not supportive to solar energy.
H1:- The economic and legal policy is supportive to solar energy.
2. H0:- The adoption of solar energy in states of India is limited.
H1:- The adoption of solar energy in states of India in not limited.
3. H0:- The technology is not a major factor in financing solar energy projects.
H1:- The technology is a major factor in financing solar energy projects.
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INTRODUCTION
Our vision is to make Indias economic development energy efficient. Over a period of
time, we must pioneer a graduated shift from economic activity based on fossil fuels to
base on non-fossil fuels and from reliance on non renewable and depleting sources of
energy to renewable source of energy. In this strategy, the sun occupies center stage, as
it should, being literally original source of all energy. We will pool our scientific, technical
and managerial talents, with sufficient financial resources, to develop solar energy as
source of abundant energy to power our economy and to transform the lives of people.
Our Success in this endeavor will change the face of India. It would also enable India to
help change the destinies of people around the world.
Dr. Manmohan Singh, Prime Minister of India
Launching Indias National Action Plan on Climate Change on June 30, 2008
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1.1. RENEWABLE RESOURCES
A renewable resource is a natural resource which can replenish with the passage of time,
either through biological reproduction or other naturally recurring processes. Renewable
resources are a part of Earth's natural environment and the largest components of its
ecosphere. A positive life cycle assessment is a key indicator of a resource's sustainability. In
1962, Paul Alfred Weiss defined Renewable Resources as: "The total range of living organisms
providing man with food, fibers, drugs, etc...".[1]
Renewable resources may be the source of powerfor renewable energy. However, if the
rate at which the renewable resource is consumed exceeds its renewal rate, renewal and
sustainability will not be ensured.
The term renewable resource also describes systems like sustainable agriculture and water
resources.
[2]
Sustainable harvesting of renewable resources (i.e., maintaining a positiverenewal rate) can reduce air pollution, soil contamination, habitat destruction and land
degradation.[3]
Gasoline, coal, natural gas, diesel and other commodities derived from fossil fuels, as well as
minerals like copper and others, are non-renewable resources without a sustainable yield.
Renewable resources are an important aspect of sustainability. According to the U.S. Energy
Information Administration, the most frequently used renewable resources are biomass,
water, geothermal, wind and solar (see References 1). Unlike fossil fuels, we can regenerate
or replenish these resources. Although biomass in the form of wood once supplied 90
percent of U.S. energy needs, all renewable energy sources combined supplied only about 8
http://en.wikipedia.org/wiki/Natural_resourcehttp://en.wikipedia.org/wiki/Earthhttp://en.wikipedia.org/wiki/Natural_environmenthttp://en.wikipedia.org/wiki/Earth%27s_sphereshttp://en.wikipedia.org/wiki/Life_cycle_assessmenthttp://en.wikipedia.org/wiki/Sustainabilityhttp://en.wikipedia.org/wiki/Paul_Alfred_Weisshttp://en.wikipedia.org/wiki/Renewable_resource#cite_note-1http://en.wikipedia.org/wiki/Renewable_resource#cite_note-1http://en.wikipedia.org/wiki/Renewable_resource#cite_note-1http://en.wikipedia.org/wiki/Power_(physics)http://en.wikipedia.org/wiki/Renewable_energyhttp://en.wikipedia.org/wiki/Sustainable_agriculturehttp://en.wikipedia.org/wiki/Water_resourceshttp://en.wikipedia.org/wiki/Water_resourceshttp://en.wikipedia.org/wiki/Renewable_resource#cite_note-2http://en.wikipedia.org/wiki/Renewable_resource#cite_note-2http://en.wikipedia.org/wiki/Renewable_resource#cite_note-2http://en.wikipedia.org/wiki/Air_pollutionhttp://en.wikipedia.org/wiki/Soil_contaminationhttp://en.wikipedia.org/wiki/Habitat_destructionhttp://en.wikipedia.org/wiki/Land_degradationhttp://en.wikipedia.org/wiki/Land_degradationhttp://en.wikipedia.org/wiki/Renewable_resource#cite_note-3http://en.wikipedia.org/wiki/Renewable_resource#cite_note-3http://en.wikipedia.org/wiki/Renewable_resource#cite_note-3http://en.wikipedia.org/wiki/Gasolinehttp://en.wikipedia.org/wiki/Coalhttp://en.wikipedia.org/wiki/Natural_gashttp://en.wikipedia.org/wiki/Diesel_fuelhttp://en.wikipedia.org/wiki/Fossil_fuelhttp://en.wikipedia.org/wiki/Non-renewable_resourcehttp://en.wikipedia.org/wiki/Sustainable_yieldhttp://greenliving.nationalgeographic.com/green-energy/http://greenliving.nationalgeographic.com/green-energy/http://en.wikipedia.org/wiki/Sustainable_yieldhttp://en.wikipedia.org/wiki/Non-renewable_resourcehttp://en.wikipedia.org/wiki/Fossil_fuelhttp://en.wikipedia.org/wiki/Diesel_fuelhttp://en.wikipedia.org/wiki/Natural_gashttp://en.wikipedia.org/wiki/Coalhttp://en.wikipedia.org/wiki/Gasolinehttp://en.wikipedia.org/wiki/Renewable_resource#cite_note-3http://en.wikipedia.org/wiki/Land_degradationhttp://en.wikipedia.org/wiki/Land_degradationhttp://en.wikipedia.org/wiki/Habitat_destructionhttp://en.wikipedia.org/wiki/Soil_contaminationhttp://en.wikipedia.org/wiki/Air_pollutionhttp://en.wikipedia.org/wiki/Renewable_resource#cite_note-2http://en.wikipedia.org/wiki/Water_resourceshttp://en.wikipedia.org/wiki/Water_resourceshttp://en.wikipedia.org/wiki/Sustainable_agriculturehttp://en.wikipedia.org/wiki/Renewable_energyhttp://en.wikipedia.org/wiki/Power_(physics)http://en.wikipedia.org/wiki/Renewable_resource#cite_note-1http://en.wikipedia.org/wiki/Paul_Alfred_Weisshttp://en.wikipedia.org/wiki/Sustainabilityhttp://en.wikipedia.org/wiki/Life_cycle_assessmenthttp://en.wikipedia.org/wiki/Earth%27s_sphereshttp://en.wikipedia.org/wiki/Natural_environmenthttp://en.wikipedia.org/wiki/Earthhttp://en.wikipedia.org/wiki/Natural_resource -
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percent of in 2009 (see References 1). With the rising cost and decreasing availability of
nonrenewable fossil fuels, renewable resources are receiving increasing attention
1.2. TYPES OF RENEWABLE RESOURCES
1. Hydropower
Hydropower is the capture of the energy of moving water (falling of water from one level to
another) for some useful purpose. This falling of water can be natural falling source or froma dam. The falling water is used to turn waterwheels or modern turbine blades which is used
to powering a generator to produce electricity. Hydropower system is a clean source of
energy systems that can neither be polluted nor consumed during its operation. It eliminates
the cost of fuel, making it immune to price increases for fossil fuels. As long there is a water
source (lake, river etc.) it is renewable.
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2. Solar Energy
Solar energy is the energy from the sun (in the form of heat and light) that is directly capture
and converted into thermal or electrical energy and harnessed as solar power. Solar power is
the technology of obtaining (harnessing) usable energy from the light of the sun. Some
applications of solar energy are hot water heating and space heating in the home. It is also
used in the application of solar panels where individual homes (in region where it is warm
and sunny) convert solar energy into thermal energy to generate electricity.
The use of solar energy displaces conventional energy where it results in a proportional
decrease in greenhouse gas emissions. The energy from the sun is free with just the initial
cost to set up the technology. The sun provides unlimited (renewable) supply of solar
energy. The only drawback is that its requires a large area to collect the suns radiation and
requires some means of storage.
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3. Wind Power
Wind power is the conversion of wind energy into electricity using wind turbines (usually
mounted on a tower). Wind power is used in large scale wind farms for national electrical
grids. On a small scale it is also used to provide electricity to rural residences. Wind energy is
ample, free, widely available, clean, and renewable, produces no waste or greenhouse
gases, need no fuel, good method of supplying energy to remote areas and can be a site for
tourist attraction. Wind is just moving air created as the sun heats the Earth's surface. As
long as the sun is shining, the wind remains an infinite, renewable resource. Wind power is
clean energy because wind turbines do not produce any emissions.
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4.Biomass
Biomass Fuel (Biofuels) is any organic material produced by living organisms (plants,
animals, or microorganisms) that can be burned directly as a heat source or converted into a
liquid or gas. Some examples of biomass fuels are wood, crop residues, peat, manure,
leaves, animal materials and other plant material.
There are two major sources of biomass: i. Trees, gains, sugar crops and oil-bearing plants.ii. Waste organic materials from industrial, commercial, domestic, or agricultural wastes.
Examples, crop residues, animal wastes, garbage, and human sewage.
Biomass fuels are sustainable. It is cheap and is less demanding on the environment or
Earth's resources. A major advantage of biomass fuel is its low greenhouse gas emission
characteristic where it adds less carbon to the environment when compared with burningfossil fuels. This is due to the fact that the carbon atoms released by burning biofuel already
exists as part of the carbon cycle. Biomass absorbs an equal amount of carbon in growing as
it releases when consumed as a fuel.
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Fuel diversity is another advantage of biomass, it can be transformed into fuel in many ways
such as in gasification, anaerobic digestion - fermentation of wet wastes (e.g. sugarcane or
corn to produce alcohol (ethanol) and esters, and animal dung to produce biogas) and direct
combustion - burning of dry organic wastes (e.g. wood and peat) just to name a few.
The use of biomass fuels can reduce dependence on foreign sources of oil whereby
providing energy security for the country using it as a fuel. This will therefore promote an
economic boost for both agriculture and the industry of that country. However, for it to be
economical as a fuel for electricity, the source of biomass must be located near to where it is
used for power generation.
5. Geothermal Energy
Geothermal Energy is power generated by the harnessing of heat from the interior of the
earth when it comes to (or close to) the earths surface. The regions with highest
underground temperatures are in areas with active or geologically young volcanoes. Chief
energy resources are hot dry rock, magma (molten rock), hydrothermal (water/steam from
geysers and fissures) and geo-pressure (methane-saturated water under tremendous
pressure at great depths).
There are several methods of deriving energy from the earths heat where the heat energy
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that is generated by converting hot water or steam from deep beneath the Earths surface is
converted into electricity. This hot water or steam comes from a mile or more beneath the
earth surface. Geothermal applications include:
i. Geothermal Electricity Production - generating electricity from the earth's heat. The steam
rotates a turbine that activates a generator, which produces electricity.
ii. Geothermal Direct Use - Producing heat directly from hot water within the earth.
iii. Geothermal Heat Pumps - Using the shallow ground to heat and cool buildings.
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1.3. SOLAR POWER
WHY SOLAR POWER ITS EMERGENCE
The radiation that comes from solar energy along with the resultant solar energized
resources such as wave power, wind, biomass and hydroelectricity all give an explanation
for most of the accessible renewable energy that is present on earth. However, only an
infinitesimal portion of the existing solar energy is used.
So the question of why solar energy is important, that persists in the minds of many, is
because solar energy can prove to have an immense amount of constructive and helpful
impact on you and on the environment as a whole. Contrasting to the fossil fuels that we
consume and use on a daily basis, solar energy does not fabricate the excessively injurious
pollutants that are liable for thegreenhouse effect which is known to lead to global warming.
Solar power use reduces the quantity of contamination and toxic waste, not to forget
pollution that the engendering plants have to produce. Global warming is an issue of great
interest. In the recent times, with more awareness about the harmful effects of global
warming, the issue is taken with great interest. There is in point of fact a massive belief that
the use of fossil fuel is a contributing factor to the cause of global warming, which will
ultimately result in the demise of the planet altogether. Probably the best part about why
solar energy is that it is a renewable source of energy, which basically means that it will stay
there forever, it will be consumed for all practical human usages. Oil, coal etc, is all bound to
finish one day and eradicate from the face of the planet. So why not put them in the storage
and use something more useful, is a basic question that many people have today.
Another key aspect of using solar energy is that it has massive financial benefits. They can
generally be seen in the reduction of your utility bills. As you would be consuming solar
power for the electricity that you use, the heating, the cooling and the lighting of your
environment. Statistically, in the United States, Americans are known to be consuming 25%
of the worlds oil production on a daily basis. On the whole, the planet is being drained of its
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oil resources and the energy prices are only bound to go up. To only mend your own
personal cost of energy needs is probably one of the smartest things to do and not to forget
a very valuable future investment, when measured up to the unavoidable rise in the cost of
energy in recent times as well as the not so far future. Solar energy systems are very much
affordable, and with the help from the local, state and the federal programs that are now
available to help in the installation costs, they seem to make much more sense than using
other sources of generating energy apart from the solar energy.
Conversely, if you take benefit of the law that was passed in 2005, which is mainly referred
to as the law of the net metering, you can actually end up saving on the price of the
batteries and use extra power back into the utility network, which if you ever have the need
to use it, can do so easily. This in short means that the utility corporation actually turns into
being your own personal storage facility, with absolutely no extra fund cost to your wallet.
On the global front, creating the use of solar energy seems to be one of the best options
available. The change in the climate world over is a serious threat to our planet which is
causing much of the problems. The emission levels of carbon dioxide that we generate by
the constant use of fossil fuel are literally killing our planet. The usage of solar energy will
only provide us with a clean environment, a life where we will not have to constantly worry
about the ever so reducing resources to provide us with the basic comforts of our life. With
net metering, the ever so reasonably priced solar technology and the ultimate willingness to
change this situation around, you can augment the energy competence of your home, and in
due course accomplish net zero fossil fuel expenditure and utilization. You will also save the
planet from dying out by using solar energy!
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2. SOLAR POWER
2.1. MEANING
Solar power is a renewable energy source --- a clean form of energy --- that converts the
sun's radiation into usable energy. The use of solar power helps reduce greenhouse gases,
offering an alternative to fossil fuels. Solar technology seeks to take advantage of the
strength of the energy provided by the sun. Earth receives more energy from the sun in a
single hour than the world's population uses in a full year.
The sun has produced energy in the form of heat and light since the Earth formed. Solar
energy systems do not produce emissions and are often not harmful to the environment.Thermal solar energy can heat water or buildings. Photovoltaic devices, or solar cells,
directly convert solar energy into electricity. Individual solar cells grouped into panels range
from small applications that charge calculator and watch batteries, to large systems that
power residential dwellings. PV power plants and concentrating solar powerplants are the
largest solar applications, covering acres.
http://greenliving.nationalgeographic.com/solar-power/http://greenliving.nationalgeographic.com/green-energy/http://greenliving.nationalgeographic.com/solar-energy/http://greenliving.nationalgeographic.com/solar-energy/http://greenliving.nationalgeographic.com/solar-power/http://greenliving.nationalgeographic.com/solar-power/http://greenliving.nationalgeographic.com/solar-energy/http://greenliving.nationalgeographic.com/solar-energy/http://greenliving.nationalgeographic.com/green-energy/http://greenliving.nationalgeographic.com/solar-power/ -
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2.2. TYPES OF SOLAR POWER
Photovoltaic
Photovoltaic or PV, technology uses solar cells arrayed on panels to capture sunlight and
convert it into electricity or heat. PV technology is used for a wide range of power needs,
from small items such as calculators and watches to larger applications for satellites, homesand businesses. Traditional solar cells are made of silicon, but other materials are coming
into use as the technology develops.
Concentrated Solar Power
In large-scale uses, concentrating solar power technologies captures sunlight using
arrangements of mirrors to direct sunlight toward receivers, concentrating the sunlight and
transforming it into heat. This heat is focused on a fluid, which as it gets hot fuels a turbine
or generator that produces electricity. Concentrating solar power is capable of generating
high levels of power and is valuable for large-scale needs like providing electricity to large
populations served by municipal utilities.
Passive Solar Power
Passive solar power is a way of taking advantage of the sun's resources through theintelligent design of buildings. Passive solar power involves designing buildings so they
receive sunlight in a way that reduces the need to consume other energy resources for heat
and lighting. Strategic placement of windows so they are exposed to significant sunlight is
one common passive solar power design tactic, providing both heat and light during the
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day. Another common design feature is the use of materials in the floors and walls that
capture, store and then release heat from the sun.
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2.3. POWER STATIONS
INDIAS LARGEST PHOTOVOLTAIC [PV] POWER PLANTS
NAME OF PLANT DC PEAK POWER[MW]
NOTES
Mithapur Solar Power Plant (Tata
Power) - Mithapur, Gujarat 25
Commissioned 25 January 2012
Waa Solar Power Plant (Madhav
Power) - Surendranagar, Gujarat 10
Commissioned December 2011
DhirubhaiAmbani Solar Park,
Pokhran, Rajasthan 40
Commissioned in April 2012
Bitta Solar Power Plant (Adani
Power) - Bitta, Kutch District,
Gujarat 40
Commissioned January 2012
Azure Power - Sabarkantha,
Khadoda village, Gujarat 10
Commissioned June 2011
Moser Baer- Patan, Gujarat
30
Commissioned October 2011
Orissa - Patapur, Orissa
9
Commissioned August 2012
Green Infra Solar Energy Limited -
Rajkot, Gujarat 10
Commissioned November 2011
http://en.wikipedia.org/wiki/Mithapur_Solar_Power_Planthttp://en.wikipedia.org/wiki/Mithapurhttp://en.wikipedia.org/wiki/Gujarathttp://en.wikipedia.org/wiki/Surendranagarhttp://en.wikipedia.org/wiki/Dhirubhai_Ambani_Solar_Parkhttp://en.wikipedia.org/wiki/Bitta_Solar_Power_Planthttp://en.wikipedia.org/wiki/Adani_Powerhttp://en.wikipedia.org/wiki/Adani_Powerhttp://en.wikipedia.org/wiki/Kutch_Districthttp://en.wikipedia.org/wiki/Sabarkanthahttp://en.wikipedia.org/wiki/Moser_Baerhttp://en.wikipedia.org/wiki/Patan_districthttp://en.wikipedia.org/wiki/Orissahttp://en.wikipedia.org/wiki/Green_Infra_Limited#Operational_projectshttp://en.wikipedia.org/wiki/Rajkothttp://en.wikipedia.org/wiki/Rajkothttp://en.wikipedia.org/wiki/Green_Infra_Limited#Operational_projectshttp://en.wikipedia.org/wiki/Orissahttp://en.wikipedia.org/wiki/Patan_districthttp://en.wikipedia.org/wiki/Moser_Baerhttp://en.wikipedia.org/wiki/Sabarkanthahttp://en.wikipedia.org/wiki/Kutch_Districthttp://en.wikipedia.org/wiki/Adani_Powerhttp://en.wikipedia.org/wiki/Adani_Powerhttp://en.wikipedia.org/wiki/Bitta_Solar_Power_Planthttp://en.wikipedia.org/wiki/Dhirubhai_Ambani_Solar_Parkhttp://en.wikipedia.org/wiki/Surendranagarhttp://en.wikipedia.org/wiki/Gujarathttp://en.wikipedia.org/wiki/Mithapurhttp://en.wikipedia.org/wiki/Mithapur_Solar_Power_Plant -
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2.4. SOLAR COMPANIES
Sr No Company PV Cell PV Module
1 Tata BP Solar India Ltd No Yes
2 Sun Techniques Energy Systems Pvt Ltd No Yes
3 Bharat Heavy Electricals Ltd Yes Yes
4 HHV Solar Technologies Pvt Ltd Yes Yes
5 Emmvee Toughened Glass &
Photovoltaics Pvt Ltd
No Yes
6 IComm Tele Ltd No Yes
7 Thrive Energy technologies (I) Ltd No Yes
8 Photon Energy Systems Ltd No Yes
9 Andromeda Energy Technologies (P) Ltd No Yes
10 Noble Energy Solar Technologies Ltd No Yes
11 XL Telecom & Energy Ltd No Yes
12 Sungrace Energy Solutions Pvt Ltd No Yes
13 Shurjo Energy No Yes
14 Synergy Renewable Energy No Yes
15 Sova Power Limited No Yes
16 Vikram Solar Pvt. Lt No Yes
17 Webel Solar Yes Yes
18 Ajit Solar Pvt. Limited No Yes
19 Alpex International No Yes
20 PV Power Tech No Yes
21 Green Brillinace Energy Pvt Limited No Yes
22 PLG Power Limited No Yes
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23 Access Solar Ltd. No Yes
24 Solar Semiconductors Pvt Limited No Yes
25 Titan Energy Systems Limited No Yes
26 Moser Baer Yes Yes27 Synergic India Pvt. Limited No Yes
28 Jain Irrigation Systems No Yes
29 Premier Solar Systems Pvt Ltd No Yes
30 Maharishi Solar Technology Pvt Ltd No Yes
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2.5. SPONSOR COMPANIES
NAME PRODUCTION
(MW)
MWp/2012
MWp/2011
PANEL
TECHNOLOGY
POWER RANGE
(Wp)
Sunlux Energy Ltd Polycrystalline
Aditi Solar Monocrystalline,
Polycrystalline
3
280
Ajit Solar 8 Monocrystalline,
Polycrystalline
75
280
BHELMonocrystalline
10
240
Borg EnergyPolycrystalline,
Monocrystalline
Central Electronics3
Monocrystalline10
180
Borg Energy3
Polycrystalline3
250
Central Electronics8 Monocrystalline,
Polycrystalline
3
240
Borg Energy0
Polycrystalline
3
310
Central Electronics1
Monocrystalline3
150
Borg Energy Monocrystalline, 10
http://www.enfsolar.com/directory/panel/20565/aditi-solarhttp://www.enfsolar.com/directory/panel/6063/ajit-solarhttp://www.enfsolar.com/directory/panel/2560/bhelhttp://www.enfsolar.com/directory/panel/26567/borg-energyhttp://www.enfsolar.com/directory/panel/2827/central-electronicshttp://www.enfsolar.com/directory/panel/26567/borg-energyhttp://www.enfsolar.com/directory/panel/2827/central-electronicshttp://www.enfsolar.com/directory/panel/26567/borg-energyhttp://www.enfsolar.com/directory/panel/2827/central-electronicshttp://www.enfsolar.com/directory/panel/26567/borg-energyhttp://www.enfsolar.com/directory/panel/26567/borg-energyhttp://www.enfsolar.com/directory/panel/2827/central-electronicshttp://www.enfsolar.com/directory/panel/26567/borg-energyhttp://www.enfsolar.com/directory/panel/2827/central-electronicshttp://www.enfsolar.com/directory/panel/26567/borg-energyhttp://www.enfsolar.com/directory/panel/2827/central-electronicshttp://www.enfsolar.com/directory/panel/26567/borg-energyhttp://www.enfsolar.com/directory/panel/2560/bhelhttp://www.enfsolar.com/directory/panel/6063/ajit-solarhttp://www.enfsolar.com/directory/panel/20565/aditi-solar -
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Polycrystalline 300
Central Electronics15 Monocrystalline,
Polycrystalline
200
315
Borg Energy 15 Polycrystalline 75225
Central Electronics8 Monocrystalline,
Polycrystalline
5
285
Borg Energy10 Monocrystalline,
Polycrystalline
10
250
http://www.enfsolar.com/directory/panel/2827/central-electronicshttp://www.enfsolar.com/directory/panel/26567/borg-energyhttp://www.enfsolar.com/directory/panel/2827/central-electronicshttp://www.enfsolar.com/directory/panel/26567/borg-energyhttp://www.enfsolar.com/directory/panel/26567/borg-energyhttp://www.enfsolar.com/directory/panel/2827/central-electronicshttp://www.enfsolar.com/directory/panel/26567/borg-energyhttp://www.enfsolar.com/directory/panel/2827/central-electronics -
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2.6. LOCATIONS /SITE ASSESSMENT
The site selection process aims at identifying sites suitable for the power plant. Following
issues have to be addressed during this phase inorder to achieve the expected result:
Definition of exclusion criteria and areas (environmental restrictions, military
facilities, etc)
Assessment of site conditions (Meteorology, land characteristics, land use, etc)
Infrastructure
Electricity price, production, and demand
Exclusion criteria and areas
Before evaluation potential areas seeking for optimum sites it is necessary to rule out
ineligible areas applying the exclusion criteria such as:
o Environmental restrictions (natural park, protected habitat, etc)
o Military facilities
o Areas affected by armed conflicts
o Existing human settlements
o Archeological restrictions
o Livestock
Assessment of site conditions
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The next foremost important task to be performed is the visits to the sites. Visits to the
areas identified allow determining the optimum sites suitable for installation of power plant
within the area by analyzing the following key associated factors:
o Meteorology
o Land characteristics
o Infrastructure
Meteorology
The solar energy i.e. irradiation, is the first criteria for the selection of a site since it is the
resource which will determine how much electricity can be produced. The amount of solar
radiation depends on following factors:
o Latitude
o Altitude
o Local climate and atmosphere
o Wind speed
o Extreme weathers
o Pollution
o Humidity
Land characteristics
The assessment of land characteristics depends on following factors:
o Size, shape and orientation
o Distance of shading objects
Land use
Ideally the foreseen site should not be covered by prior agricultural use. Keeping in mind the
existing restrictions regarding plant operation the condition of the site has to be
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documented during site visit. Care needs to be taken by recognizing protected trees,
agricultural use, livestock pathways, or alike, which might represent future constraints for
the project.
Infrastructure
Infrastructure includes following factors:
o Grid availability
o Access to the site
o Proximity to roads, railways, ports, cities, or airports
o Water availability
o Electrical situation in the region
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2.7. TECHNOLOGY
Solar energy is the energy derived from the sun through the form of radiation. A number of
solar thermal applications have been developed, which include water/air heating, cooking,
drying of agricultural and food products, water purification, detoxification of wastes,
cooling and refrigeration, heat for industrial processes, and electric power generation. This
technology route also includes solar architecture, which finds utility in designing and
construction of energy efficient buildings.
Photovoltaic (PV) cells have a low efficiency factor, yet power generation systems using
photovoltaic materials have the advantage of having no moving parts. PV cells find
applications in individual home rooftop systems, community streetlights, community water
pumping, and areas where the terrain makes it difficult to access the power grid.
Photovoltaic (PV) cells are placed on the rooftop of houses or commercial buildings, and
collectors such as mirrors or parabolic dishes that can move and track the sun throughout
the day. The efficiency of solar photovoltaic cells with single crystal silicon is about 13 % - 17%.
High efficiency cells with concentrators are being manufactured which can operate with low
sunlight intensities.
Types of solar cells available:
The PV cells are manufactured by hundreds of manufacturers worldwide and there areseveral different technologies available. There are three main types of commercially
available PV cells:
Mono crystalline silicon PV
Polycrystalline silicon PV
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Thin film amorphous silicon PV
At present the first two categories dominate world markets constituting 93% of it the last
one account for 4.2% of the market. There are other types of solar cells but is less in use
which includes concentrated photovoltaic, hybrid solar cells, multi junction solar cells etc.
The silicon based technologies, crystalline Silicon, multi-crystalline Silicon, amorphous silicon
are the dominant technologies at 24%, 19% and 12% efficiencies respectively at cell levels. The
efficiencies at module levels are 5-6 % lower due to variety of reasons. Most of the Indian
companies are producing at 15-17% efficiencies at cell levels and at about 12-13% at module
levels. There is scope of improvement in different technologies.
A Thin-Film Solar Cell (TFSC), also called a Thin-Film Photovoltaic Cell (TFPV), is a solar cell
that is made by depositing one or more thin layers (thin film) of photovoltaic material on asubstrate. The thickness range of such a layer is wide and varies from a few nanometers to
tens of micrometers. Many different photovoltaic materials are deposited with various
deposition methods on a variety of substrates. Thin Film Solar Cells are usually categorized
according to the photovoltaic material used. The following categories exist:
Cadmium Telluride (CdTe)
Copper indium gallium selenide (CIS or CIGS)
Dye-sensitized solar cell (DSC) Organic solar cell
Amorphous silicon (a-Si)
On an average the efficiency of thin film cells are 6-12% furthermore the thin-film PV market
is showing a spectacular annual growth rate of 126% in 2007. These thin film solar cells will be
suitable for window and facades in Building Integrated PV (BIPV) technologies.
High efficiency solar cells with concentrators:
Highest efficiency solar cells have micro morph triple junction Ge/GaAs/GaInAsP materials.
Technology is quite intricate and cost of triple junction solar is quite high. Hence, these cells
are primarily used for satellite applications. For terrestrial applications, these cells are used
in high concentration mode to reduce usage of costlier cells. Using optical reflectors, light is
concentrated from 200-500 times on 1 cm2 active area. The Sun is tracked daylong in two
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dimensions to keep the sunspot on device area. Only few companies have mastered the cell
and tracker technologies. There is need to know better and perfect the cell and tracker
technologies.
2.8. INPUT COST
Total project cost per MW is in the range of Rs.6.5 Crores-Rs.8 Crores depending on the kind
of technology being used, whether or not tracking systems are used, the kind of EPC
Contractor is chosen for power plant system etc. CERC recently announced the benchmark
tariff for setup of Solar PV and Thermal Plants in India. Heres the link to the document
containing more details: http://www.cercind.gov.in/2013/orders/SO242.pdf
The table below indicates CERC determined benchmark cost for Financial Year 2013-14.
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Central Electricity Regulatory Commission (CERC) benchmark costs for O&M is Rs.11.63
lakhs/year/MW for 2013-14 with a 5.72% increase every year. This varies from project to
project based on the number of people employed for maintenance, frequency of cleaning of
panels, onsite-engineer availability etc.Per unit production cost is dependent on how much cost you are setting up the power plant
for. Accordingly, the per unit sale cost can be set based on the expected returns.
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2.9. POLICY FRAMEWORK
MINISTRY OF NEW AND RENEWABLE ENERGY
Ministry of New and Renewable Energy (MNRE) is a nodal Ministry of the Government of
India at the National level for all matters relating to new and renewable energy such as solar,
wind, biomass, small hydro, hydrogen, geothermal, etc. The endeavor of the Ministry is to
promote renewable enable technologies and increase the contribution of renewable energy
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in the total mix in the years to come. The Ministry has created testing centers to ensure
quality and standard products in the market. Besides, MNRE has created Centre for Wind
Energy technology (C-WET), Solar Energy Centre (SEC) and National Institute of Renewable
Energy (NIRE). In addition, the Ministry is supporting some Centre of Excellence in
Renewable Energy.
The Ministry has a wide range of programmes on research and development,
demonstration, and promotion of renewable energy for rural, urban, commercial, and
industrial applications as well as for grid interactive power generation. A three fold
strategy is being followed:
a) Providing support for research, development, and demonstration of technologies;
b) Facilitating institutional finance through various financial institutions;
c) Promoting private investment through fiscal investments, tax holidays, depreciation
allowance and remunerative returns for power fed into the grid.
JAWAHARLAL NEHRU NATIONAL SOLAR MISSION TOWARDS
BUILDING SOLAR INDIA
INTRODUCTION
The National Solar Mission is a major initiative of the Government of India and State
Governments to promote ecologically sustainable growth while addressing Indias energy
security challenge. It will also constitute a major contribution by India to the global effort to
meet the challenges of climate change.
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This mission is one of the eight key National Missions which compromise Indias National
Action Plan on Climate Change. It has a twin objective to contribute to Indias long term
energy security as well as its ecological security.
The objective of the Jawaharlal Nehru National Solar Mission (JNNSM) under the brand
'Solar India' is to establish India as a global leader in solar energy, by creating the policy
conditions for its diffusion across the country as quickly as possible. The Mission has set a
target of 20,000MW and stipulates implementation and achievement of the target in 3
phases (first phase upto 2012-13, second phase from 2013 to 2017 and the third phase from
2017 to 2022) for various components, including grid connected solar power.
The successful implementation of the JNNSM requires the identification of resources to
overcome the financial, investment, technology, institutional and other related barriers
which confront solar power development in India. The penetration of solar power,
therefore, requires substantial support. The policy framework of the Mission will facilitate
the process of achieving grid parity by 2022.
In order to facilitate grid connected solar power generation in the first phase, a mechanismof bundling relatively expensive solar power with power from the unallocated quota of
the Government of India (Ministry of Power) generated at NTPC coal based stations, which
is relatively cheaper, has been proposed by the Mission. This bundled power would be
sold to the Distribution Utilities at the Central Electricity Regulatory Commission (CERC)
determined prices.
The Mission also provides for NTPC's Vidyut Vyapar Nigam Ltd or NVVN to be the designated
Nodal Agency for procuring the solar power by entering into a Power Purchase Agreementor PPA with Solar Power Generation Project Developers who will be setting up Solar Projects
during the next three years, i.e., before March 2013 and are connected to the grid at a
voltage level of 33 kV and above. For each MW of installed capacity of solar power for which
a PPA is signed by NVVN, the Ministry of Power (MoP) shall allocate to NVVN an equivalent
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amount of MW capacity from the unallocated quota of NTPC coal based stations and NVVN
will supply this bundled power to the Distribution Utilities. This Scheme is referred to as
the 'Bundling Scheme' in these guidelines.
Considering the fact that some of the grid connected solar power projects were already at
an advanced stage of development, the guidelines for migration of Projects from their
respective existing arrangements to the ones envisaged under JNNSM have already been
issued by Ministry of New and Renewable Energy.
The goal to ensure large scale deployment of solar generated power for grid connected as
well as distributed and decentralized off grid provision of commercial energy services.
ROADMAPSr.
No.
Application Segment Target for Phase
1 (2010 13)
Target for Phase
2 (2013 17)
Target for Phase
3 (2017 2022)
1 Solar collectors 7 million sq
meters
15 million sq
meters
20 million
meters
2 Off grid solar applications 200 MW 1000 MW 2000 MW
3 Utility grid power,
including roof top
1000 2000 MW 4000 10000
MW
20000 MW
The objective of the Mission is to create a policy and regulatory environment which provides
an incentive structure that enables a rapid and large scale capital investment in solar
energy applications and encourages technical innovation and lowering of costs.
Although in long run, the mission would seek to establish a sector specific legal and
regulatory framework for the development of solar power, in the shorter time frame, itwould be necessary to embed the activities of the Mission within the existing framework of
the Electricity Act 2003.
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The National Tariff Policy 2006 mandates the State Electricity Regulatory Commissions
(SERC) to fix a minimum percentage of energy purchase from renewable sources of energy.
National Tariff Policy, 2006 would be modified to mandate that the State electricity
regulators fix a percentage to purchase solar power. The solar power purchase obligation
for States may start with 0.25% in the Phase 1 and to go upto 3% by 2022.
This could be complemented with solar specific Renewable Energy Certificate (REC)
mechanism to allow utilities and solar power generation companies to buy and sell
certificates to meet their solar power purchase obligations.
The Central Electricity Regulatory Commission (CERC) has issued guidelines for fixing feed-in-
tariff for purchase of solar power which will be revised on an annual basis. The CERC has also
stipulated that Power Purchase Agreement that utilities will conclude with solar power
promoters, should be for a period of 25 years.
NTPC has a wholly owned subsidiary company engaged in the business of trading of Power
NTPC Vidyut Vyapar Nigam Ltd. (NVVN).
NVVN will be designated as a nodal agency for entering into Power Purchase Agreement
(PPA) with Solar Power Developers to purchase solar power fed to 33 KV and above grid, in
accordance with the tariff and PPA duration as fixed by the Central Electricity Regulatory
Commission.
The Ministry of Power shall allocate to NVVN, equivalent megawatt capacity, from the
Central unallocated quota, from NTPC power station, at the rate notified by the CERC forbundling together with solar power.
NVVN will undertake the sale of the bundled power to State utilities at the rates determined
as per CERC regulations.
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Those State utilities will be entitled to use the solar part of the bundled power for meeting
their Renewable Purchase Obligations (RPO) under the Electricity Act, 2003.
The above arrangement will be limited to utility scale solar power generated from a
maximum anticipated capacity of 1000 MW in the first phase.
The requirement of the phase indigenization would be specified while seeking development
of solar power projects under this scheme. The tariff and tax regime for key components
and segments would be suitably fine tuned so as to promote the process of indigenization.
The Mission will encourage rooftop PV and other small solar power plants, connected toLT/11 KV grid, to replace conventional power and diesel based generators. The distribution
utility will pay the tariff determined by the State Electricity Regulatory Commission for the
metered electricity generated from such applications.
Under the Solar Mission, a normative Generation Based Incentive will be payable to the
utility and would be derived as the difference between the solar tariff determined by the
CERC for the concerned solar generation technology lees an assumed base price of Rs
5.50/kWh with 3% annual escalation.
The distribution utilities would be entitled to account such electricity generated and
consumed within the license areas of fulfillment of RPOs.
State Governments would also be encouraged t promote and establish solar generation
parks.
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2.10. GOVERNMENT INCENTIVES
THREE INCENTIVE MECHANISM
REBATES
With investment subsidies, the financial burden falls upon the taxpayer, while with
feed-in tariffs the extra cost is distributed across the utilities' customer bases. While
the investment subsidy may be simpler to administer, the main argument in favor offeed-in tariffs is the encouragement of quality. Investment subsidies are paid out as a
function of the nameplate capacity of the installed system and are independent of its
actual power yield over time, thus rewarding the overstatement of power and
tolerating poor durability and maintenance.
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FEED-IN-TARIFFS
With feed-in tariffs, the financial burden falls upon the consumer. They reward the
number of kilowatt-hours produced over a long period of time, but because the rate
is set by the authorities, it may result in perceived overpayment. The price paid per
kilowatt-hour under a feed-in tariff exceeds the price of grid electricity.
SOLAR RENEWABLE ENERGY CERTIFICATES
Alternatively, SRECs allow for a market mechanism to set the price of the solar
generated electricity subsity. In this mechanism, a renewable energy production or
consumption target is set, and the utility (more technically the Load Serving Entity) is
obliged to purchase renewable energy or face a fine (Alternative Compliance
Payment or ACP). The producer is credited for an SREC for every 1,000 kWh of
electricity produced. If the utility buys this SREC and retires it, they avoid paying the
ACP. In principle this system delivers the cheapest renewable energy, since the all
solar facilities are eligible and can be installed in the most economic locations.
Uncertainties about the future value of SRECs have led to long-term SREC contract
markets to give clarity to their prices and allow solar developers to pre-sell/hedge
their SRECs.
The price per kilowatt hour or per peak kilowatt of the FIT or investment
subsidies is only one of three factors that stimulate the installation of PV. The other
two factors are insolation (the more sunshine, the less capital is needed for a given
power output) and administrative ease of obtaining permits and contracts.
http://www.srectrade.com/srec_forwards.phphttp://www.srectrade.com/srec_forwards.phphttp://www.srectrade.com/srec_forwards.phphttp://www.srectrade.com/srec_forwards.php -
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2.11. GRID PARITY AND NET METERING
GRID PARITY
Grid parity for photovoltaic (PV) technology is defined as the point where the cost of PV-
generated electricity equals the cost of electricity purchased from the grid. Achieving grid
parity is a function of many variables, including the solar resource, local electricity prices,
and various incentives. The break-even cost for photovoltaic (PV) technology is defined as
the point where the cost of PV-generated electricity equals the cost of electricity purchased
from the grid. This target has also been referred to as grid parity and may be expressed in
$/W1 of an installed system.
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NET METERING
Net metering, unlike a feed-in tariff, requires only one meter, but it must be bi-directional.
Net metering is particularly important because it can be done with no changes to standard
electricity meters, which accurately measure power in both directions and automatically
report the difference, and because it allows homeowners and businesses to generate
electricity at a different time from consumption, effectively using the grid as a giant storage
battery. As more Photovoltaics are used, ultimately additional transmission and storage will
need to be provided, normally in the form of pumped hydro-storage. With net metering,
deficits are billed each month while surpluses are rolled over to the following month. Best
practices call for perpetual rollover of kWh credits.[85] Excess credits upon termination of
service are either lost, or paid for at a rate ranging from wholesale to retail rate or above, as
can be excess annual credits. In New Jersey, annual excess credits are paid at the wholesale
rate, as are left over credits when a customer terminates service.
2.12. State wise status and opportunities in solar power generation
On the basis of solar power utilization and generation, states are categorized into four
groups: top performers, potential risers, slow movers and non-movers.
Top performers: There are four states namely Gujarat, Rajasthan, Karnataka and
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Maharashtra which are actively participating in solar power movement. These regions
receive a significant amount of solar radiations throughout the year which provide great
opportunity for harnessing solar power. These states have well planned solar policy (except
Maharashtra) and commissioned new solar power projects.
Potential Risers: Tamil Nadu, Andhra Pradesh, Orissa, Haryana, Uttar Pradesh, Punjab and
Uttrakhand have great potential for solar power generation and they are going to
commission solar power projects under National Solar Mission and other solar schemes.
Some of these states have drafted their own solar policy.
Slow movers: West Bengal, Manipur, Chhattisgarh, Jharkhand, Pondicherry, Delhi, Jammu
and Kashmir, Tripura, Kerala and Mizoram are at the growing stage of solar power
generation. Some solar plants are commissioned in Delhi, Jharkhand, and Chhattisgarh only.Other states also have good solar power potential but there is no development so far due to
lack of proper policy framework.
Non-Movers: There is no development in the direction of solar power generation in
Himachal Pradesh, Assam, Arunachal Pradesh, Nagaland, Sikkim, Meghalaya and Goa. They
even do not have any solar policy.
STATE POLICY
FEATURES
STATES
CAPACITYPER YEAR
ELECTRICITYDUTY
REACTIVEPOWERCHARGES
BANKINGCHARGES
CDMBENEFITS
GUJARATMinimum5 MW
Exemptedfrom payment
for sale50%exemption fordemand cut
As perGERC
order
50lakhs/MW
at the timeof PPAsigningwithDistributionLicensee
50% ofCDM
benefit
Minimum Exempted for As per 50 Benefit as
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RAJASTHAN 5 MW &Maximum10 MW
own use RERCorder
lakhs/MW perDISCOMs
order
KARNATAKA40 MW Exemption for
captive
consumptionand thirdparty salewithin state
As perKERC
order
2% bankingcharges
Benefits asper
biddingproceeds
MADHYAPRADESH
Minimum1 MW &Maximum100 MW
10 yearexemption(from COD)
As perMPERCorder
2% bankingcharges of100%energy inevery F.Y
Benefits asperMPERC
ANDHRA
PRADESH
Minimum
5 MW
Exemption for
captiveconsumptionand thirdparty salewithin state
As per
APRECregulation
2% banking
charges of100%energy inevery F.Y
Benefits as
perAPREC
2.13. ADVANTAGES AND DISADVANTAGES
Solar Energy Advantages
The power source of the sun is absolutely free.
The production of solar energy produces no pollution.
The technological advancements in solar energy systems have made them extremely
cost effective.
Most systems do not require any maintenance during their lifespan, which means you
never have to put money into them.
Most systems have a life span of 30 to 40 years.
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Most systems carry a full warranty for 20 to 30 years or more.
Unlike traditional monstrous panel systems, many modern systems are sleeker such
as Uni-Solar rolls that lay directly on the roof like regular roofing materials.
In 35 states, solar energy can be fed back to the utilities to eliminate the need for astorage system as well as eliminating or dramatically reducing your electric bills.
Solar energy systems are now designed for particular needs. For instance, you can
convert your outdoor lighting to solar. The solar cells are directly on the lights and
cant be seen by anyone. At the same time, you eliminate all costs associated with
running your outdoor lighting.
Solar Energy Disadvantages
Initial Cost: The initial cost of purchasing and installing solar panels always become the
first disadvantage when the subject of comes up. Although subsidy programs, tax
initiatives and rebate incentives are given by government to promote the use of solar
panels we are still way behind in making full and efficient use of solar energy. As new
technologies emerge, the cost of solar panels is likely to decrease and then we can see
an increase in the use of solar cells to generate electricity.
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Location: The location of solar panels is of major importance in the generation of
electricity. Areas which remains mostly cloudy and foggy will produce electricity but at
a reduced rate and may require more panels to generate enough electricity for your
home. Houses which are covered by trees, landscapes or other buildings may not besuitable enough to produce solar power.
Pollution: Most of the photovoltaic panels are made up of silicon and other toxic
metals like mercury, lead and cadmium. Pollution in the environment can also degrade
the quality and efficiency of photovoltaic cells. New innovative technologies can
overcome the worst of these effects.
Inefficiency: Since not all the light from the sun is absorbed by the solar panels
therefore most solar panels have a 40% efficiency rate which means 60% of the sunlightgets wasted and is not harnessed. New emerging technologies however have
increased the rate of efficiency of solar panels from 40 to 80% and on the downside
have increased the cost of solar panels as well.
Reliability: Unlike other renewable source which can also be operated during night,
solar panels prove to be useless during night which means you have to depend on the
local utility grid to draw power in the night. Else you can buy solar batteries to store
excess power which you can later utilize in the night. Installation area: For home users, a solar energy installation may not require huge
space but for big companies, a large area is required for the system to be efficient in
providing a source of electricity.
2.14. APPLICATION / OFF-TAKE
The potential customers of solar power installation fall into these categories:
Residential colonies: There is a strong sense of community among the residential colonies
of urban and suburban India where residents are quite likely to pool their resources together
to create a small local grid for the colony.
Business office complexes: Companies such as IBM, EMC, Intel, Pfizer, etc. have built
immense office complexes in the last 5-8 years that house thousands of employees and huge
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Solar lamps and lighting
By 2012 46,00,000 solar lanterns and 861,654 solar powered home lights have been
installed. These typically replace kerosene lamps and can be purchased for the cost of a
few months worth of kerosene through a small loan. The Ministry of New and
Renewable Energy is offering a 30% to 40% subsidy for the cost of lanterns, home lights
and small systems up to 210 WP.20 million solar lamps are expected by 2022.
Agricultural support
Solar PV water pumping systems are used for irrigation and drinking water. The majority
of the pumps are fitted with a 2003,000 watt motor that are powered with 1,800 Wp
PV array which can deliver about 140,000 liters of water per day from a total head of
10 meters. By 30 September 2006, a total of 7,068 solar PV water pumping systems had
been installed, and by March 2012, 7,771 had been installed.Solar driers are used to dry
harvests before storage.
Solar water heaters
Bangalore has the largest deployment of rooftop solar water heaters in India. These
heaters generate an energy equivalent of 200 MW.Bangalore is also the first city in the
country to put in place an incentive mechanism by providing a rebate of 50 on
monthly electricity bills for residents using roof-top thermal systems. Pune, another
city in the western part of India, has also recently made installation of solar water
heaters in new buildings mandatory.
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Indias solar power industry began significant growth only in 2010, when the Jawaharlal
Nehru National Solar Mission (JNNSM) was announced. After the announcement of JNNSM,
grid-connected solar PV capacity increased by 165% in 2011 alone to reach 427MW. However,
a failure to address the remaining financing challenges will make the targets set under
JNNSM Phase 2 (4,000-10,000MW by 2017) and Phase 3 (20,000MW by 2022).
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FINANCIAL ASPECTS
SOURCES OF FINANCE
A variety of investors finance renewable energy projects in India, including institutions,
banks, and registered companies (Table 2-1). Institutional investors are either state-owned or
bilateral and multilateral institutions. Among banks, both private sector and public sector
banks are involved. In addition to registered companies, venture capital and private equity
investors contribute equity investment. Return expectations of the investors vary according
to the sources of their funds and the risk attached to specific projects.
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During 2006-09, Indias annual total renewable energy investment remained between USD 4
billion and USD 5 billion. Investment has risen rapidly since then, from USD 4.2 billion in 2009
to USD 12.3 billion in 2011 (Figure 2-3).
While wind continues to receive the majority of investment, solar has seen the highest
growth, and the gap between the two is falling rapidly, as shown in Figure 2-4.
Table 2-1: Renewable energy investors (number of institutions)
TYPE OFINVESTOR
CATEGORY TOTALREGISTEREDIN INDIA
ACTIVE INRENEWABLESECTOR
Commercialbanks
Public sectorbanks
26 9
Privatesector banks
30 6
Foreignbanks
37 -
Equityinvestors
Privateequity
51 16
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Venturecapital
180 21
Institutionalinvestors
Insurancefunds
24 11
DevelopmentBanks
Developmentfinancial
institutions*
3 3
DEBT - EQUITY INVESTORS
Conditions for renewable finance can be very different depending on the technology
employed, the developer, geography, or the requirements of the investors themselves. The
most important distinction is between investors in the debt markets (lenders) and those in
the equity markets (owners).
Generally speaking, debt investors are more conservative, accepting lower returns in
exchange for lower risk. As such, their primary concern is that downsides are limited; that is,
that the project does not fail. Equity investors are willing to take more risk in exchange for
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higher returns, and therefore focus equally on risk and the prospects of a project performing
even better than expected. Under most circumstances, a project will be least expensive
when it is funded by a mix of debt and equity, either at the project level, or through debt
and equity secured at the corporate level.
Renewable energy financing can become costly when either debt or equity investors
demand too high a return or when either is simply unavailable. Thus, for both debt and
equity there are two sets of questions:
Cost and terms: Are the returns investors are demanding and the conditions they are
placing on their investment so onerous as to make the project economically unattractive?
Or;
Availability: Is debt or equity just not available? That is, are there enough investors willingto invest or lend to renewable projects in India?
Significantly, while policy can influence the returns required by equity and debt investors
and the availability of either, different policies are likely to be important to different classes
of investors.
In India, the differences between debt and equity are particularly striking. In general, we find
that equity appears to be readily available at a reasonable cost, while renewable energy
debt is both limited and expensive.
To compound the problem, access to potentially lowercost international debt is limited due to regulatory barriers, the cost and risks associated
with long-term currency swaps, and perceived country risks.As a result, the cost of debt to a
renewable energy project in India will typically be in the 10-14% range, as compared to the 5-
7% range typical in the United States. Despite the higher cost, debt in India also suffers from
inferior terms, including shorter tenors and variable rather than fixed interest rates.
There are many factors that influence the total finance cost. Here are five common factors:
The cost of debtThe tenor of debt that is, the length of time over which the debt is repaid
Whether the debt is variable or fixed
Extra risk that will be taken on by equity in the event that debt rates are variable
The cost of equity, or the required return on equity (ROE)
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LENDERS
The advent of IPPs in the wind power sector has helped to establish project financing as the
new normal. Today an increasing number of domestic banks are considering renewable
energy projects on a non-recourse basis. This shift in the attitude of financiers is reflected inextended maturities and tenor of loans and lower borrowing costs.
Venture capital and private equity firms are also viewing renewables as an emerging
opportunity. Deals worth $437.3 million (~ INR 2348.30 crores) were struck during the third
quarter this year and included project finance, debt financing and venture capital funds.
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Changing market perception is also endorsed by the participation of renewable energy
generation companies in the equity market through the IPO route. For example most
recently the Indian firm Infrastructure Leasing and Financial Services announced its plans to
list its wind power business through an approximately $325-$406 million business trust IPO
in Singapore by early 2013.
Multilateral funding institutions are offering new avenues for investors in key developing
country markets as part of their climate finance obligations and broader energy strategies.
According to BNEF, development bank financing of renewable energy projects rose from
$4.5 billion in 2007 to $13.5 billion in 2010, led by multilateral development banks (MDBs)
such as the European Investment Bank, Asian Development Bank and the World Bank Group
as well as national development banks (NDBs) such as KfW Bankengruppe (Germany), ChinaDevelopment Bank and BNDES (Brazil).
Bilateral funding agencies are also extending support to wind power development across
Asia. To name a few, the United States Agency for International Development (USAID) has
been actively promoting development of renewable energy through its Market
Development for Renewable Energy programme, the Chinese Development Bank and the
KfW (German development bank) have been financing clean energy investments in various
developing countries including India.Development banks have a key role to play in mobilizing capital when and where it is needed
most. Commercial lenders, faced with global economic uncertainty and investments in
unfamiliar markets often look to development banks to share various risks, whether
perceived or real. An on-going positive dialogue between project developers,
manufacturers, political and regulatory stakeholders and public funding institutes is the way
forward to secure sustainable growth both from a financial and environmental point of
view.
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LENDING CRITERIA OF BANK
A considerable amount of work is carried out before the loan is agreed, to check that the
project is well planned and that it can actually make the necessary repayments by the
required date. This process is called due diligence, and it is carried out on behalf of the
bank. The investors will make careful consideration of technical, financial and political risks,
as well as considering how investment in a project fits in with the banks own investment
strategy. The due diligence of the project will include the following criteria:
Site assessment
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Resources available
Assessment of technology
Estimation of annual yield
Plant layout Project technical details and layout
Permits and clearances
Financial analysis
Risk assessment and mitigation of the project
Generally, a bank will not lend 100 per cent of the project value and will expect to see a cash
contribution from the borrower this is usually referred to as equity. It is typical to see 25
30 per cent equity and 7075 per cent loan (money provided by the bank as their
investment). Occasionally, a loan of 80 per cent is possible.
The size of the loan depends on the expected project revenue, although it is typical for
investors to take a cautious approach and to assume that the long-term income will be
lower than assumed for normal operation. This ensures that the loan does not immediately
run into problems in a year with poor wind conditions or other technical problems, and also
takes into account the uncertainty associated with income prediction.
The bank after considering the project viability it decides upon the revenue generation per
unit and adjusts it with the prevalent tariff rates. Another criteria of bank is if the project is
unable to generate requisite amount energy then the bank will collect the remaining amount
from the sponsorer of the project.
PROSPECTS OF SOLAR
SOLAR POWER IN INDIA
India is committed towards increasing the share of renewable power in the electricity mix to
15 per cent by the year 2020. Indian energy sector is expected to be at par with the global
stipulations on carbon emissions and sustainability through various changes in the current
set-up. The launch of Jawaharlal Nehru National Solar Mission, a joint initiative of the
Ministry of New and Renewable Energy and Ministry of Power, is one of the most important
environment friendly energy solutions available in India.
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The National Solar Mission targeting 20,000 MW grid solar Power, 2,000 MW of off-grid
capacity including 20 million solar lighting systems and 20 million square meters solar
thermal collector area by 2022 is under implementation.
Last year witnessed a significant growth in number of new initiatives in the renewable
energy sector. The wind energy sector picked up momentum by adding over 2,800 MW
capacities resulting in grid-connected renewable power capacity crossing the 22,000 MW
milestones during 2011, grid-connected solar power plants crossed the 100 MW milestones
as well. Further, over 1000 remote villages were electrified through renewable energy
systems during this year. Wind power is the fastest growing renewable energy sectors in
India. A total capacity of 15,880 MW of wind power has been installed in the country. A
capacity of around 2827 MW has been installed during 2011. Following the CentralGovernments decision to enforce the Energy Conservation Building Code in new buildings
to minimize the use of energy and recommendations to the state governments to follow the
same with suitable amendments warranted by local circumstances and requirements, the
state of Haryana has enforced the provisions of the code. The code is applicable to all
buildings and complexes having a connected load of 500 KW and more, or having a contract
demand of 600 KVA and more.
The development and deployment of renewable energy, products, and services in India isdriven by the need to
decrease dependence on energy imports
sustain accelerated deployment of renewable energy system and devices
expand cost-effective energy supply
augment energy supply to remote and deficient areas to provide normative consumption
levels to all section of the population across the country
And finally, switch fuels through new and renewable energy system/device deployment.India has one of the worlds largest programs for deployment of renewable energy products
and systems, with wind energy being one of the highest with 11087MW installed.
States with strong potential: (potential MW /installed MW
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FUTURE MARKET POTENTIAL
It is believed that Indian Photovoltaic market have huge potential. The future generation of
gadgets will mostly comprise those powered by the solar energy. Depleting non-renewableenergy resources, rising electricity bill and increasing awareness about green energy
sources, have prompted people to adopt technologies to harness the abundantly available
solar energy.
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It is clean, reliable and safe and if used skillfully, can reduce our dependency on conventional
form of energy and save money as well as environment. Today, there is a wide range of solar
devices available in the market including solar mobile phones, solar chargers, solar shaver,
solar candles, solar lamps, solar headphones, solar exhaust fans, solar heating devices, solar
energy saver etc.
India today is the worlds fourth largest economy. Its economy has grown steadily over the
last 30 years, averaging 7% annually since 2000. Electricity demand is growing at 8% annually,
similar to the growth of the economy. According to some articles, there is 92 GW electricity
demand over the next 10 years. India has a power generation capacity of about 170k MW of
which only about 8 10% is generated through renewable sources. The country has an
estimated renewable energy potential of around 85 GW from commercially exploitablesources: wind: 45 GW, small hydro: 15 GW and biomass/bio-energy: 25 GW. India has the
potential to generate 35 MW/km2 using solar photovoltaic and solar thermal energy.
The Government of India and its state governments have created a major initiative called
The National Solar Mission. One of the main features of the Mission is to make India a
global leader in solar energy and the mission envisages an installed solar generation capacity
of 20 GW by 2022. This could in fact be much larger due to private initiatives that will no
longer need state aid.
FUTURE DEMAND
There is an immense potential for solar gadgets in India, but certain hurdles prevent the rise
in their demand. Environmental awareness is a prime factor fueling the demand of solar
gadgets; however, in India this awareness is not as high as it should be. About 70 per cent of
India lives in villages with very poor or no electricity supply. The demand for solar gadgets
has increased in the past two to three years and the solar market has gained momentum.
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During the last quarter we have noticed a 25 to 30 percent rise in sales. However, this
demand has mostly come from small scale industries and villages. Although the market
potential for solar products is huge, availability of coal generated electricity at Rs. 2.80/Kwh
is the biggest hindrance for selling solar generated electricity that costs Rs 15/Kwh. It implies
that when it comes to spending money, people prefer to save rather than care for the
environment.
Based on likely predictions of growth for the next decade, the solar module demand
worldwide until is forecast as follows:
2010 2011 2012 2014 2017 2020
13.6 20.2 23.8 33 85 200
The JNNSM guidelines stipulate that the entire grid connected Solar PV plants in India
coming under the scheme will have to use Solar PV modules that are made in India.
COMPANYS PROFITABILITY
Investment opportunities:
There is a large scope for investments in solar energy sector and Government of India is
taking all the necessary measures to promote the solar energy generation in the country.
The policy measures and incentives taken by the government of India to promote
investment in solar energy sector are as follows:
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Joint Ventures: A number of companies have entered into joint ventures with leading
global PV manufacturers. There are no specific conditions laid down by MNES for the
formation of joint ventures. General conditions lay down by the Ministry of Industry,
Secretariat for Industrial Approvals and the Reserve Bank of India are applicable for this
sector.
Export-oriented Units (EOQ): It is possible to set up a manufacturing plant as a 100 percent EOU. Generally, these are permitted duty-free import of raw materials and
components. They are also eligible to sell up to 20% of their production in domestic markets.
Technology Transfer Indian PV industry is interested in seeking technology for the
manufacture of PV modules especially based on thin film materials, and is able to offer
technology for the manufacture of silicon solar cells, PV modules and PV systems. Technology Development: R&D projects are supported by the government at
Central/state government research organizations, autonomous societies, universities,
recognized colleges, IITs, industries (with suitable infrastructure for R&D) and NGOs.
CURRENT NEWS -2013
The central Electricity Regulatory Commission (cerc) has extended the validity of
renewable energy certificates (recs) from 365 days to 730 days from the date of
issuance.
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Appellate Tribunal for Electricity (APTEL), cogeneration power plants are not
required to meet RPOs, even if they generate electricity using fossil fuels.
The Union Budget 2013-14 has proposed to reintroduce the generation based
incentive scheme for wind energy projects and allocate Rs 8 bln to the Ministry of
Renewable Energy (MNRE) for the purpose.
As per the Railway Budget 2013-14 Indian Railways will set up 75 MW of windmills and
energize 1000 level crossing with solar power during the year.
The Tamil Nadu Generation and Distribution Corporation (TANGEDCO) has selected
29 firms for setting up solar power plants, aggregating 226 MW of capacity as part of
its 1 GW solar tender.
The Andhra Pradesh Government has received 294 bids aggregating 1350 MW from
184 bidders in response to its tender for setting up 1000 MW of solar power plants.
Rajasthan Renewable Energy Corporation Limited (RRECL) has received bids
aggregating 185 MW from 23 qualified bidders.
Indore based M and B Switch Gears Ltd became first solar power developer in India
to be issued Solar Renewable Energy Certificate by the National Load Dispatch centre
(NDLC) on May24,2012.
For renewable energy there is increase in budget 15.34 bln (13-14) as compared to
11.63 bln (12-13)
The Kerala government has formally launched its 10000 Solar Rooftop Power Plants
Programme 2012-13.
Refex Energy commissioned two large-scale grid-connected solar PV plants with a
total installed capacity of 20 MW in Bikaner district of Rajasthan, on February 25,
2013.
Azure Power has commissioned 35 MW of solar power capacity in Kathauti village on
Nagpur, Rajasthan, under Batch II of the JNNSM Phase I, ahead of the commissioning
deadline.
The Madhya Pradesh Government has earmarked 1000 acres of land in Neemuch
district to set up Indias biggest solar power plant of 130 MW.
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Kiran Energy has commissioned three solar PV projects, aggregating 55MW, at Rawra
village in Jodhpur district of Rajasthan under Batch II of the JNNSM. L&T and
Mahindra EPC were the engineering, procurement and construction contractors for
the project, which is expected to produce about 90000MWh of electricity per year,
thereby reducing carbon emissions of about 80000 tonnes annually. Apart from this,
the company is also building clusters of solar projects in several states including
Maharashtra, Gujarat, Karnataka, Rajasthan and Tamil Nadu, with capacities ranging
from 50 MW to 100MW.
Domestic and International lenders are looking to invest in the sector, which is
expected to witness a capacity addition of 30 GW during the 12 th plan period (2012-
17). As per conservatives estimates, about $600 mln of foreign direct investments are
estimated to have come into the Indian Renewable Energy sector 2012-13 ($467.07
mln has already come in during the nine-month period ended December 2012).
The Punjab Energy Development Agency has invited requests for proposal for setting
up 300 MW of solar photovoltaic projects under the first phase of the states New
and Renewable Sources of Energy Policy,2012
Uttar Pradesh has issued a tender for 200 MW of solar PV capacity, following the
finalization of its solar policy, which aims at installing 500 MW of capacity in the state
by March 2017.
The Maharashtra State Power Generation Company has proposed a performance-
linked revenue sharing model for setting up solar projects, under which developers
would build, operate and maintain a solar power plant on a quasi-ownership basis.
The Solar Energy Corporation of India has selected three solar power companies
SunEdison, Thermax and Azure Power to set up rooftop solar power projects inBengaluru, Chennai, Delhi and Gurgaon.
NTPC has commissioned two solar power projects in the Andaman and Nicobar Island
and Dadri (Uttar Pradesh), with a capacity of 5MW each.
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State-owned common salt manufacturing firm Hindustan Salts Ltd is looking to
partner with Bharat Heavy Electricals Ltd for installing a 2500 MW solar generation
integrated plant in Rajasthan.
The Ministry of New and Renewable Energy has directed telecom operators to use
solar power to energize at least 50000 towers on an immediate basis.
The ADB has agreed to provide $2 mln of equity to Simpa Networks for helping the
latter scale up the sales of its off-grid-pay-as-you-go solar energy solutions in India.
Mytrah Energy Ltd has agreed to conditional terms for acquiring 59.75 MW of
existing and operational wind power assets in Maharashtra and Tamil Nadu.
MEL has secured funds aggregating Rs 11 bln from the State Bank of India, PTC India
Financial Services Ltd and a consortium of senior debt providers.
Developer Planned Capacity Addition(MW)
Mytrah Energy India Ltd 5,000.0
NTPC 1,025.0
Indian Energy Ltd 1000.0
Welspun Energy Ltd 850.0
Greenko Energies Private Ltd 665.0
RS India Wind Energy Ltd 500.0
Inox Renewables Ltd 400.0
Tata Power Company Ltd 388.0
Beta Wind Farm Private Ltd 300.0
Suryachakra Green Power Pvt Ltd 300.0
Gujarat State Petroleum Corporation Ltd 200.0
Reliance Wind Energy Ltd 200.0
CLP India Pvt Ltd 163.2
CAPACITY ADDITION PLANS OF KEY PLAYERS UPTO 2018
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Gamesa Wind Turbines Pvt Ltd 160.0
Indowind Energy Ltd 128.0
Green Infra Ltd 125.0
GAIL (India) Ltd 115.0Oil and Natural Gas Corporation 102.0
NHDC Limited 100.0
TEECL (Simran Wind Project Pvt Ltd) 100.0
Others 1,065.6
Total 12,886.8
Source: Centre for Monitoring India Economy; Renewable Watch Research
Azure Power has expanded the capacity of its existing 5 MW plant in Nagpur,
Rajasthan by 35 MW, becoming the largest solar power capacities to be
commissioned at a single location under the JNNSM.
The Economy Energy Connect
Even after the global economic meltdown, India registered a GDP growth of 6.5% in 2011-12.
Though modest, compared to its blockbuster performance of 8.4% in the previous two years,
it is still respectable, given the dire economic breakdown in developed countries. Growth
forecast for GDP for 2012-13 has been put at 6.7%, by the Economic Advisory Council to Prime
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Minister, in their report of August 2012. Planning Commission has estimated that during XII
Five Year plan period (2012-13to 2016-17), for a GDP growth of 9% per year, energy supply hasto grow at 6.5% per year. The ability to meet the energy requirement will depend upon
Indias ability to expand domestic production in the critical subsectors such as petroleum,
natural gas and coal, and meeting the balance requirement through imports.
Drivers for Energy Demand
Indias per capita energy consumption has grown at CAGR of 3.44% during 1970-71 to 2010-
11.At the current level of 4816 KWH (2010-11), this is lowest amongst all major developing
economies in the world. Though this can be partly attributed to the service oriented nature
of Indian economy, the per capita energy consumption is low even when compared to
countries such as Brazil, Argentina and Mexico that have a GDP composition similar to thatof India. The fact that India is dominated by a rural population at 69%, which largely depends
on non commercial sources to meet its energy needs also contributes to the low recorded
per capita energy consumption. As per 2011 Census data, percentage of rural households
using firewood, crop residue and cow dung as primary cooking fuel are 62.5%, 12.3% and
10.9%, respectively. Percentage ofhouseholds owning 2 wheelers and 4 wheelers is 21% and4.7%, respectively. Only 47.2% households use televisions. As this segment of India, otherwise
known as bottom of the pyramid moves towards urbanization with higher disposable
income for better standard of living, the energy demand is set to go up significantly. Energy
Development Index (EDI), devised by International Energy Agency (IEA), value for India has
declined from 0.295 in 2007 to 0.294 in 2011. In the last decade, while Indias GDP and
primary energy consumption have grown at a CAGR of 7.6% and 6.6%, respectively, its energy
intensity has decreased by -0.23% over 1970-71 to 2010-11 and is currently at 0.1167 KWH per
rupee, very low as compared to its peer countries. The ability of India to grow at such
attractive levels of energy intensity is laudable; albeit it is consistently driven by energy
deprivation. If India is to service the ambition of providing employment to growing
employable demographic constituents and maintain social harmony, an increase in energy
intensity is perhaps unavoidable.
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METHODOLOGY
The method of collection of data was through the Detailed Project Report given by mentor,
various periodicals of Renewable Watch of 2012 2013. Research reports of various
researchers etc.
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CONCLUSION
The future of renewable energy in India is limitless. Indias leadership in the clean energy
program is scaling new heights which is supported and facilitated by economic & legal
policy. Although, the renewable energy scenario in India is in nascent stage; the trend keeps
growing. The existing laws and policies have made it easier for this sector to flourish. A
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developed India fuelled on solar power will be a model state for the world community.
Howsoever, a dedicated uniform policy like that of Gujarat for the solar power generation
can really help in harnessing solar energy at massive scale. Majority states in India receive a
considerable amount of solar radiation; therefore there is a scope for tapping solar energy
at the commercial level. Thus, there is a need to have a uniform national policy for the
setting up of solar power plants in India.
The energy sector in India can face challenges and gain prospects by fostering technological
innovations in collaboration with global partners. Conditions required are: a) regulatory
environment in energy sectors, including coordination and synergy amongst ministries of
the federal government and b) investment climate including capital market regulation. The
third requirement is people aspect of innovation. Innovation fosters best in a diverse workenvironment where people with different background and viewpoints mix, but Indian
energy industries have been slow to recognize this need for diversity. A survey by the Global
Energy management Institute indicated that bringing leadership from outside the energy
sector will provide fresh perspectives and can help resolve the issues facin