Role of Government for Solar Energy Products Market Promotion with Special Reference to Solar Photovoltaic Power Plants - Indian Scenario

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1 Vol. 6, No. 1, 2015, Role of Government for Solar Energy Products Market Promotion with Special Reference to Solar Photovoltaic Power Plants - Indian Scenario Susmitha Mohan M. 1, Philo Francis 2 Abstract The sun produces an unbelievable amount of energy that reaches the earth. The amount of energy that is absorbed by the earth in one hour is more energy than mankind uses in one year. This article specially concentrates on SPV which is promoted by the governments all over the world and tried to investigate about the total installed capacity of solar PV in India, study the difference in the installed capacity of solar on grid and off grid and growth rate in India, study the role of government in promoting solar by various projects in India, know the state wise potential of solar PV and achievement in India and to know the social impact of solar energy products with special reference to SPV and SWH. Key words: SPV power plant- Solar Photovoltaic Power Plant, SWH- Solar Water Heater 1. Introduction Energy plays a vital role in the socio-economic development and human welfare of a State. Apart from its contribution to economic development, it contributes significantly to revenue generation, employment and enhances the quality of life. Per-capita power consumption is considered as an indicator for measuring the standard of living of the society. Making available the required quantity of power at affordable price is the responsibility of the state. The possibility of tapping non-conventional sources of energy and private participation in energy development, conserving depleting reserves and controlling rising prices are thrust areas. Development of the power sector is the key to the economic development. The sun produces an unbelievable amount of energy that reaches the earth. The amount of energy that is absorbed by the earth in one hour is more energy than mankind uses in one year. The total amount of solar energy reaching the earth in one year is huge - twice as much energy as ever existed from all sources of coal, oil, natural gas, and uranium combined. The solar energy industry can be broadly categorized into two types, namely, solar thermal industry and solar PV (photovoltaic) industry.the solar photovoltaic industry is fairly complicated. Indian solar energy sector has been growing rapidly, in the past few years, majorly due to Government s initiatives such as tax exemptions and subsidies. Due to technical potential of 5,000 trillion kwh per year and minimum operating cost, Solar Power is considered the best suited energy source for India. The world is deciding to completely eliminate the use of fossil fuel by the end of 21 st century. At the end of 2009, the world s cumulative installed PV capacity was more than 23 GW. One year later it was 40.3 GW and at the end of 2011 it was 70.5 GW. In 2012, the 100 GW mark was reached and by 2013, almost GW of PV had been installed globally an amount capable of producing at least 160 terawatt hours (TWh) of electricity every year. China became the top PV market in the world in 2013 and achieved the world s largest PV installation figure in one year with 11.8 GW connected to the grid, after Italy installed 9.3 GW in 2011 and Germany installed between 7.4 GW and 7.6 GW from 2010 to Japan scored 6.9 GW and 1 Research Scholar Research & PG Department of Commerce St.Joseph s College Irinjalakuda Calicut University 2 H.O.D & Associate Professor Research & PG Department of Commerce St.Joseph s College Irinjalakuda Calicut University 2015 Research Academy of Social Sciences 24

2 took the second place in 2013, while the USA installed 4.8 GW. Solar power is attractive because it is abundant and offers a solution to fossil fuel emissions and global climate change. Earth receives solar energy at the rate of approximately 1,73,000 TW. This enormously exceeds both the current annual global energy consumption rate of about 15 TW, and any conceivable requirement in the future. India is both densely populated and has high solar insolation, providing an ideal combination for solar power in India. The Ministry of New and Renewable Energy (MNRE) is the nodal Ministry of the Government of India for all matters relating to new and renewable energy. The broad aim of the Ministry is to develop and deploy new and renewable energy for supplementing the energy requirements of the country. The role of new and renewable energy has been assuming increasing significance in recent times with the growing concern for the country's energy security. Energy self-sufficiency was identified as the major driver for new and renewable energy in the country in the wake of the two oil shocks of the 1970s. Solar Energy Market Scenario Energy requirement is expected to increase by 200% from financial year 2015 to financial year GW will contribute to 18.9% of the entire power consumption in India in 2022.Global energy capacity is 673GW solar capacity of 177GW and India stands 11 th with 3.3GW.In India,market potential for rooftop SPV 124GW The solar energy industry can be broadly categorized into two types,namely, solar thermal industry and solar PV (photovoltaic) industry. Power shortages are estimated at about 11% of total energy and 15% of peak capacity requirements which is likely to increase in the coming years. The cost of production range is Rs 15 to Rs 20 per unit for the solar energy, which is very high when compared to, Rs 2 to Rs 5 per unit for other conventional sources in India. Much of the country does not have an electrical grid, so solar power will indeed be a boon for water pumping, to begin replacing India's four to five million diesel powered water pumps, each consuming about 3.5 kilowatt of off-grid lighting. Solar energy technology consists of solar thermal technologies, which utilize sun s energy and solar photovoltaic technology, which convert solar energy directly into electricity. According to the 11th five year plan, the government of India projects a massive expansion in installed solar capacity, and aims to reduce the price of electricity generated from solar energy, to match that from fossil fuels like coal and diesel by India has been ranked 7th worldwide for solar photovoltaic (PV) cell production and secure 9th rank in solar thermal power generation. This capacity is growing rapidly due to the entry of various private players in manufacturing of solar energy equipment. The household solar power systems market is expected to increase by 60% annually, to reach an estimated market size of $250 million in 2018 and the number of households using such power systems is expected to more than double to 7.2 million by 2018, as per a recent market study. About half a million solar home power systems were sold to about households in 2014 which is expected to increase by 6 times to 3 million in Power generated from these solar home power systems helped offset tonnes of CO2 in 2014 which is expected to increase to more than tonnes of CO2 by The country has set a goal to have 100,000 MW of installed solar power capacity by 2022, up from the current 3,000 MW. However, the investment commitments India has received already exceed a capacity of 200,000 MW, Piyush Goyal, coal and renewable energy minister, told reporters on Wednesday, as cited by the Press Trust of India (PTI). Objectives 1) To study the total installed capacity of solar energy in India with special reference to PV. 2) To study the difference in the installed capacity growth rate of solar ongrid and offgrid in India. 3) To study the role of government in promoting solar by various projects in India. 4) To analyse the state wise potential of solar and achievement in India. 5) To know the social impact of solar energy installations. 25

3 2. JNNSM S. M. Mohan & P. Francis The Jawahar Lal Nehru National Solar Mission is a major Initiative of the Government of India and the state Government to promote ecologically sustainable growth while addressing India s energy security challenges. It will also contribute a major contribution by India to the global effort to meet the challenges of climate change. The mission is one of the several initiatives that the part of National Action Plan on Climate Change. The first phase (up to March 2013) focuses on promoting off-grid systems including hybrid systems to serve the population which is located in remote areas. For the first phase modest targets were set under the expectation that this development would bring down costs under enabling framework and support for entrepreneurs to develop markets. This cost reduction would help in creating conducive environment to achieve the ambitious targets of the second phase ( ) and third phase ( ). The main features of the National Solar Mission are: 1. Make India a global leader in solar energy and the mission envisages an installed solar generation capacity of 20,000 MW by 2022, 1,00,000 MW by 2030 and of 2,00,000 MW by The total expected investment required for the 30-year period will run is from Rs. 85,000 crore to Rs. 105,000 crore. 3. Between 2017 and 2020, the target is to achieve tariff parity with conventional grid power and achieve an installed capacity of 20 gigawatts (Gw) by GW of installed solar manufacturing capacity by To deploy 20 million solar lighting systems for rural areas by 2022 Utility grid power including roof top (MW) Off-grid solar Table No:1 JNNSM targets with timeline ] applications (MW) [Solar collectors (sq. m) 7 million 15 million 20 million Programme /Scheme Wise Physical Progress in Grid Interactive Power(capacities in MW) Target Achievement Cumulative Achievement Solar power Off grid captive power SPV system Other form of solar Solar water heatingcoll.areas(million m2)

4 Table no.2: State wise Installed Capacity of Solar Projects under various Schemes as on 15/12/2014 (in MW) States Total Other programs Total MNRE State RPO REC Private CPSUs commissioned % projects scheme initiative capacity till 15/12/14 Andhra Pradesh Arunachal Pradesh Chhattisgarh Gujarat Haryana Jharkhand Karnataka Kerala Madhya Pradesh Maharashtra Orissa Panjab Rajasthan Tamil Nadu Telangana Uttar Pradesh Uttarakhand West Bengal Andaman & Nicobar Delhi Lakshadweep Puducherry Chandigarh Others Total Table No:2-State wise solar potential in India Total Solar Power in % GWp: GWp State Solar Potential (GWp) Andhra Pradesh Arunachal Pradesh Assam Bihar Chhattisgarh

5 S. M. Mohan & P. Francis Delhi Goa Gujarat Haryana Himachal Pradesh Jammu & Kashmir Jharkhand Karnataka Kerala Madhya Pradesh Maharashtra Manipur Meghalaya Mizoram Nagaland Orissa Punjab Rajasthan Sikkim Tamil Nadu Telangana Tripura Uttar Pradesh Uttarakhand Social Cost Benefit Analysis SWH-A 100 Liters per day capacity SWHs can replace an electrical geyser of 2 kw capacity for residential use and may save up to 1250 units of electricity annually and up to 1.25 tons of CO2 per year depending upon the location of installation Under JNNSM Phase 2, set targets installing 7 million square meter collector area by 2013, around 7.01 million square meter collector ar(4893 MW) has been achieved. Fuel Savings A 100 litres capacity SWH can replace an electric geyser for residential use and saves 1500 units of electricity annually. Avoided utility Cost on Generation The use of 1000 SWHs of 100 liters capacity each can contribute to a peak load saving of 1 MW. Environmental Benefits A SWH of 100 liters capacity can prevent emission of 1.5 tones of carbon dioxide per year. Approximate Cost: Rs ,000 for a 100 litres capacity system and Rs per installed litre for higher capacity systems. Life: years Payback period: 3-4 years when electricity is replaced 4-5 years when furnace oil is replaced 5-6 years when coal is replaced 28

6 SPV-Solar energy is measured in kilowatt-hour. 1 Kilowatt-hour = 1000 watts. 1 Kilowatt-hour (Kwh) equals the amount of electricity required to burn a 100 watt light bulb for 10 hours. A Solar panel system consists of Solar panels, an inverter, a battery, grid, balance of system consisting of mounting system with/without tracker, AC and DC disconnects conduits, brackets, cables and connectors, a charge controller and electric meter 1 Kilowatt solar panel system is made up of four to five panels with dimensions around feet in length and 3 feet in height. Present costs are round 4000$ to 7000$ per KW depending upon the quality of panels and equipment. School buildings come under a category of non-residential, commercial buildings while some schools come under different levels depending upon the amount of Kilowatt system needs to be installed at a particular school site (EIA 1995), (css.snre.umich 1991). 1 Kilowatt Solar system will generate approximately 1600 kw-hours per year in a sunny climate with average of five hours sunshine per day and approximately 750 kw-hours per year in a cloudy climate receiving two and half hours sunshine per day. 1 Kilowatt system will prevents approximately one hundred and seventy pounds of coal from being burned and three hundred pounds of carbon dioxide from being released into the atmosphere. Photovoltaic system consists of solar modules tested under standard test conditions with a life of twenty-five (25) years and above Solar panels will allow the following benefits:- 1) Savings in transmission and distribution losses 2) Low gestation time 3) No requirement of additional land 4) Local employment generation 5) Reduction of power bill by supplying surplus (If your solar panel generates excess power, this electricity can be fed back to the grid thus electricity to local electricity supplier 6) Battery elimination makes easy installation and reduced cost of system 7) Can reduce your family s carbon footprint 8) Can reduce the impact of climate change and lead the way to sustainable India which is one of the objective of our Millennium Development Goals. 9) Installing solar panels become more affordable due to government incentive schemes. 10) It can also lead long term energy savings by cutting down on electricity cost. 11) All of the solar panels that install come with a 25 year panel efficiency warranty. 12) A typical solar PV system on a single house can save almost a tonne of CO2 pollution every year and approximately 23 tonnes over a 25 year life time. According to the US department of Energy, each American resident is responsible for 23 tonnes of CO2 emissions every year throughout the economy. That means each year, everything we do : work,play, drive, heat or cool our homes, vacation,shops,cook, watch TV,go to school, hang out the mall and of course, breathe produces 23 tonnes of carbon dioxide (and other GHGs) per person. 4. Findings 1) Gujarat comes first with 30.9% installed capacity of solar projects under various schemes followed by Rajasthan with and Madhya Pradesh with 11.75%. 29

7 S. M. Mohan & P. Francis 2) In , the target for for grid interactive solar was 1100 MW and achievement was only (430.67)39.15%. 3) In , Target for off grid solar was 60 MW and the achievement was 87.95% (52.77). 4) Total installed capacity through MNRE projects stood at 833.4MW while through state schemes, it was MW. 5) In case of installation of solar energy through RPO is more in Gujarat (50%) followed by Rajastan (40%) and Karnataka (10%). 6) In case of REC, Rajastan comes first with 35% followed by Maharastra (22.2%) and Madya Pradesh (15%). 7) Telgana with 34% comes first in solar installation through private initiation followed by Karnataka with 18%. 8) In case of CPSU projects,cental Public Sector Undertakings) UP comes first with 15.5% followed by AP,MP,Punjab with 9.5%. 9) When analyzing the statewise potential in India, Rajasthan comes first with solar energy potential of GW (19%) followed by Jammu Kashmir with GW (14.5%). 5. Discussions One such policy which has helped improve the growth of new sectors is the Priority Sector Lending (PSL) status. The benefits of priority lending sector is that it can ease access to capital via mainstream banks, and to provide agencies like IREDA, SIDBI and NABARD with clarity on funding in this sector. The PSL will also help to increase employability, create basic infrastructure and improve competitiveness of the economy, thus creating more jobs. -According to one estimates, the combination of electricity demand growth, fossil fuel cost and availability challenges, and supportive environmental regulations could increase solar power capacity to more than 50 GW by The market will see a significant change after Lower solar costs combined with rising prices of grid power will convince offtakers (including distribution companies, and firms putting up their own captive capacity) that solar power is economically viable. India is now in 7th place worldwide in Solar Photovoltaic (PV) Cell production and 9th place in Solar Thermal Systems with nations like Japan, China, and the US currently ranked far ahead. Globally, solar is the fastest growing source of energy (though from a very small base) with an annual average growth of 35%, as seen during the past few years. The government of India is promoting the use of solar energy through various strategies. In the budget proposal for , the government has announced an allocation of Rs.10 billion towards the Jawaharlal Nehru National Solar Mission and the establishment of a Clean Energy Fund. It s an increase of Rs. 3.8 billion from the previous budget. Also budget has also encouraged private solar companies by reducing customs duty on solar panels by 5 percent and exempting excise duty on solar photovoltaic panels. All these types of incentives are expected to increase the share of solar energy product market. References Mehta,P.R.,(2015) An optimistic outlook. Energy Next,Volume:5,Issue:7,22-23 Krishnakumar,S.,(1995) Potential of Solar Energy in India s Context,Sun and Small Energy Needs, 1-6. Sootha,G.D.,(1995) Potential for Photovoltaic Technology for India Sun and Small Energy Needs, 7-15 Bhargava,B., (1995) Implimentation of PV Programe in INDIA Sun and Small Energy Needs Zamora,C.G.,(1995) Research and Development and Commercialisation of Solar PV technology in the Phillippines. Sun and Small Energy Needs,

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