Solar energy can be perhaps the best source of energy for rural India. I don’t know about other states, but in the villages around my own in Bihar and that of Yamuna, many petty farmers have installed the solar plates. Mostly, it provides the digital connectivity and entertainment through TVs and music system, besides lighting the home and cooling too with fans. It must be put to many more uses- pumps, airconditioning, computerization, etc.

Solar rays can be used to heat or produce electricity. Solar photovoltaics (SPV) systems transform solar heat directly into power.

Solar energy accounted for a minuscule 0.039% of the world’s total energy supply in 2004. But estimates suggest that globally, SPV power has grown by an average of 41% a year over the past three years.

PV systems in India add up to only about 245 mw in aggregate capacity as of December 2005, the latest available data with the ministry of new and renewable energy. Interestingly, India is very much well placed so far the sunlight is concerned. India receives solar energy equivalent to over 5000 trillion kWh/year, which is far more than the total energy consumption of the country.

Main challenges for solar energy technology are that of increasing the efficiency and cutting down the cost.

 The efficiency of transforming solar heat into power has improved from a lowly 6% to a more respectable 15%. Some US firm such as Sunpower produces the most efficient silicon photovoltaic cell in the world, which operates at 21 per cent efficiency (percentage of energy from sunlight that is converted into electricity). The theoretical maximum is 28 per cent. Spectrolab, a subsidiary of Boeing, makes non-silicon solar cells that reach 40 per cent efficiency.

 The other effort is to cut down the cost. The costs of SPV panels have come down from as much as $20 per watt to just over $2.5/W. One company is working to reduce the cost of polysilicon, the most important raw material from $3 (Rs 120) a kilo to $1 (Rs 40) a kilo.

Indian Players

International SPV players are very bullish on India. Domestic entrepreneurs are also coming forward.

Tata BP Solar, one of India’s first solar panel makers, with revenues of Rs 450 crore, exports 80 per cent of its products. The Bangalore-based company plans to double manufacturing capacity to 80 MW by end-2007 and scale up to 300 MW by 2010. Tata BP Solar is investing $100 million to create a solar plant in Bangalore.

Moser Baer Photo Voltaic has a 40-MW (megawatt) facility in Greater Noida. It plans to boost capacity to 300 MW by 2010. Moser Baer picked up stakes in the US-based Stion Corporation and SolFocus, and Slovenia-based Solarvalue, and had invested Rs 260 crore in setting up a Photo Voltaic (PV) business to manufacture solar cells and modules. From $100 million (Rs 400 crore) this year, the company expects revenues of $1 billion (Rs 4,000 crore) by 2010. As reported, the company is “working to bring down cost from an average of 35 cents (Rs 14) per kilowatt to 10 cents (Rs 4).” A solar panel six times larger than current models is slated for early 2009.

Overseas players are also getting into India. As reported, California-based Signet Solar will invest $2 billion (Rs 8,000 crore) over the next 10 years in three photovoltaic cell plants here. With an initial investment of $ 150 million (Rs 600 crore), each of these facilities will have an annual output of 300 MW.

Solar Semiconductor, another US-based company, is setting up an SPV unit in Hyderabad.

Efficient Indian manufacturers can get into export too, as the global PV cell market stands at $7-8 billion and is expected to grow to $40 billion by 2010. According to a report by brokerage firm CLSA, the PV sector is set to grow at 38% year-on-year till 2010 to a total capacity of 6GW, taking the industry turnover to $35-40 billion.

Currently, 60 companies are in production of PV in some way or the other. With significant incentive in new semi-conductor policy, multibillion-dollar investments may be coming. Many SPV projects are reportedly in the pipeline, with the investment running to about $5-6 billion. The manufacturing process for making silicon microprocessor chips and SPV cells is basically the same, though that for the latter is far less complicated requiring fewer steps. The investment requirement is about $300 million for an SPV unit of 100 mega MW capacity.

As reported, half the global production of photovoltaic cells goes to Japan, mainly in grid-connected homes. Japan makes 40 per cent of the $6-billion (Rs 24,000-crore) solar market, expected to touch $40 billion (Rs 1,60,000 crore) by 2010. Solar-powered homes, common in Germany (40 per cent share) and the US, give power to the grid during the day (the meters run backwards) and draw power at night. This lowers the net electricity consumed by the grid.

Future Solar stations will be connected to the grid. India still fares poorly on solar electricity generation, but the government has set a target of 10 power plants of 1-MW each. State electricity boards have been asked to use at least 0.2 per cent of the electricity they generate from grid-connected photovoltaic projects by 2011. Compare this to India’s potential for solar power generation - 600 GW.

How is India using the solar energy at the ground level? Over 500,000 solar cookers are in use around India. The Tirupati Tirumala Devasthanam heats 100,000 litres of water a day using solar power. The government intends to make solar-powered systems mandatory in hotels and hospitals.

Innovatively designed solar cookers and lanterns could drastically reduce the need for subsidising kerosene (SKO) and domestic cooking gas (LPG). Solar PV water pumping systems can reduce the consumption of diesel. 7002 such pumps are already installed. And the saving in subsidy for kerosene, LPG, and diesel may be about Rs 40,000 crore per annum.