Everyone around the world is talking solar. Solar photovoltaic, thin film solar and other solar technologies. Few years back it was wind. Government all across the world are giving generous grants to companies that are setting up solar power plants.
India also started its solar mission where it is offering Rs17 (USD 0.35) per kWh for generation. And it wish to set up 10,000 MW capacity. Government is collecting this money by levying surcharge on coal and gas. The strategy looks nice on paper. You are charging surcharge on fossil fuels to encourage renewable energy sources. Everyone will think that is great strategy and government is doing an excellent job.
I beg to differ. You can “encourage” in many ways. Giving incentive to generate power is the most bad way to do it. What is going to happen is Companies are going to set up 100 MW projects, get into 25 year power purchase agreements and then sit back and relax. Half of the companies who have dived into the scheme are just opportunity hunters, looking to take advantage of price difference. As many companies start their solar plants what is India going to get is huge amount of power generation capacity of old soon to be outdated technology. Renewable energy sector is changing rapidly and today’s impressive technology can be obsolete within few years. The proper approach is to incentive technology developers and equipment manufacturers and not power producers.
For example Currently to set up a 1 MW solar power plant Rs 15 Crore (USD 3.4 million) are needed. instead of giving grant to power producer Govt. can give grant to make equipment cheaper. This will encourage competition and developers will get choice of many technologies. Also you will not be acting against market to setup a market.
Such approach will allow innovation and will develop new technologies. According to me giving grants to old technology is the last thing to do. Considering speed at which Govt. approves projects, banks provide loans and problems faced in land acquisition, the technology selected to set up a plant will be old by the time developer passes all the hurdles. Throwing cash at problem such as global warming is not going to solve it. To solve such problems you need innovation and cutting edge technology. I fail to understand how current solar incentive schemes used all across world are going to achieve that.
Signing off
Nikhil Parchure
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So what's the solution?
ReplyDeleteI tried to touch upon solution. Investing in research and development for making technology cheaper, this is a long term solution. For short term subsidy to solar power equipment manufactures. Such as tax credit (Not rebate), More R&D deductions etc. Everything should be oriented towards new technology.
ReplyDeleteNice one Niks.
ReplyDeleteI may share my findings from a study project I did with the help of Mr. Ashok Paranjpe. I'm sure you know him.
I think government should create a forum, where all SMEs in solar power generation(there is rarely any big name in there yet)can come together take leads to whats happening in international arena and might also put in their own inputs.
This will certainly help the small companies and more importantly it will save country's money that goes out into Germany or Holland for ex., when a firm purchases primary tech. support to start up its operation. At least for primary tech can be made available by such forum if it comes to be..
Govt. discounts the solar products or services but it takes huge money to actually setup-develop and be able to sell the product. Lots of firms are discouraged by that risk.
In addition there should be easy access and discounts on LED lightings, for their manufacturing cost, efficiency and long life.
Its better if you save it than to generate more to meet the demands.
Don't they say, 'Precaution is better than cure.'