Ways to support domestic Solar market growth

"Indian PV market is still nascent, but the good thing is that market in different parts of the world has already developed and we can take cue from there. We have seen that in countries like Germany prudent government involvement has done wonders & today Germany is leader in Solar energy applications and time has now come there that government is stepping back & market will take over on its own.

India is all set to introduce “Reverse Metering” which would be a revolutionary step in the right direction, we also have a very strong banking system which has proven itself many times during financial crises across the world, but banks are hesitant and solar projects is definitely not in the list of ventures at the top of their minds, the initial investments are high and returns though secured and good take time to realize. Solar in India at least has yet to prove itself on returns factor.

I reckon we need to introduce a couple of measures so as to simulate the market.

An extension of the proposed feed-in tariff to more than the current 10 years, and higher rates, would be good first steps. The feed-in tariff presented does not currently promise a convincing ROI. That will make the risks too high for banks to provide financing. And project financing is nowadays the most crucial issue in getting projects moving.

Another move could be to guarantee funds for financing new solar projects, this would counter bank’s hesitation and it will be a win-win situation as people are willing to pay interest of 10% or even more.

This would be a great thing in Indian market. No subsidies are needed so government can marvel on having developed something for the common man without including an element of “Charity”, no government handout is required just the provision of finance will suffice. It could be either private or government (micro of macro).

The benefits are going to be huge, saving solar energy, bringing down power shortage and all that for attractive returns, I’d in fact go on to say that energy sector hold the key in accelerating the economic growth in India, with the targeted growth rate of 8%, energy requirements in India are expected to grow by approx. 6% per annum which is four fold in next 25 yrs, think of all the opportunities it would bring in. It seems only a matter of time before Indian PV market flourishes, believe me when I say its going to India’s next “Slumdog millionaire”.