Is the Government’s Overly Aggressive Solar Thrust in Public Interest?

India’s current solar capacity is less than 8 GW. Shortly after coming to power, the Modi government declared a fivefold increase—in the 2022 target for solar generation capacity in the country—to an eye-popping 100 GW.Less than a year before, India’s electricity establishment had estimated 100 GW to be India’s solar potential till 2032 (MoP 2014: 22)! The target has been set without reference to the coal-fired capacity addition in progress and at a time when capacity utilisation of existing thermal plants is very low and there is a large uncertainty on how electricity demand will develop in the next few years (Singh 2016; Tongia 2016: 6). The only argument the government has offered in favour of its aggressive solar thrust is that this would help India meet its international commitments on carbon emissions (GoI 2015a). Questions have been raised about whether such a rapid build-up of non-fossil fuel capacity is indeed necessary to meet these commitments (Tongia 2016: 17), but they have remained unanswered.

The government estimates the investment requirement for 100 GW of solar generation to be of the order of 6 lakh crore. Globally, renewable energy (RE) is a favourite of investors, and the government’s solar programme has been enthusiastically received. Foreign investors, such as SunEdison, SkyPower, Fortum India and SoftBank and Indian business houses, including Adani, Tata and Mahindra, have aggressively participated in the large solar tenders. Competition is fierce and the Ministry of New and Renewable Energy has had to hire large halls to accommodate all interested players during pre-bid meetings (Kenning 2015).