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India Bolsters Solar Ambitions

Last month, India suffered the biggest electrical blackout in the world. Despite causing widespread chaos, such an incident will not have come as a huge surprise to the local population. Blackouts, brownouts and chronic shortages of power happen with an alarming frequency, with a huge percentage of the country without power at all.

India relies primarily on fossil fuel power plants for the production of electricity. However, the Indian government and private industry has taken huge leaps forward in the development of solar power. Plans have just been announced to increase solar power production further as it seeks additional clean-energy investments to combat power shortages. India is aiming for 20,000 MW of solar power by 2022. Since most of the country’s existing capacity of 1,040 MW was built in the past year, that seems like a practical target.

The government announced earlier this year that there are to be 3,000 MW of solar projects to be built by 2017, with a view to begin building next year. India may now auction off a third of these solar projects in the current financial year.
Contracts for “1,000 megawatts or a little less” may be tendered in the first batch, stated Tarun Kapoor, joint secretary at the Ministry of New and Renewable Energy. The plan provides some guidance to solar utilities and manufacturers, which have said India must demonstrate a reliable pipeline of projects to draw the investment needed to meet its targets.

“Predictable demand is probably the most important factor for us in the creation of additional manufacturing capacity,” Sujoy Ghosh, country head of First Solar Inc., the world’s biggest thin-film panel maker, said in an interview this month.
Of the existing solar capacity in India, 620 megawatts of projects were auctioned until December while the rest was built in the western state of Gujarat under a separate program. The government awarded 350MW of solar capacity in the December auction to utilities including Leon Black’s Apollo Global Management LLC-backed Welspun Group, Mahindra Group and partner Kiran Energy Solar Power Pvt. and World Bank-backed Azure Power India Pvt.

Those projects are due to be completed by early 2013. Kapoor said 260 MW, or 76% of them, plan to use thin-film panels and the remainder will install silicon-based crystalline panels. This is good news for Indian solar panel and component producers. Prime Minister Manmohan Singh’s government seeks to turn India into a global hub with rules to help almost triple manufacturing capacity to 5 GW by 2020. Sales, which slid 29% in the year ended March 31 to 727 million rupees, may jump 38% in the current financial year to 1 billion rupees.

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