The Jawaharlal Nehru National Solar Mission is a major initiative to “promote ecologically sustainable growth while addressing India’s energy security challenge.” The objective of the scheme is to enable the rapid scale-up of capacity and technological innovation so that the cost of solar energy by 2022 would be comparable to the cost of conventional energy like coal or oil for electricity. The Clinton Climate Initiative is even more optimistic, stating that “Solar power in India will cost less than coal energy in five years.” The use of solar power will also help India to curb carbon emissions and ease its frustrating power shortage.
Dubbed “the most ambitious plan to develop solar energy over the next three or four decades,” its target is the deployment of 20,000 MW of solar power by 2022. To see just how ambitious the plan is, consider that as of October 2009 there were only 6 MW1 of installed solar power capacity in India. The plan also seeks to deliver 20 million solar lighting systems for rural areas by 2022, but as of October 2009 only 510,877 have been installed. Through this policy, the government has provided the market with a strong signal that is sure to attract many investors to reconsider the potential solar opportunities in India. Aided by generous incentives from the central government, that target might yet be met.
One of these incentives is concessional financing in the form of low interest loans and accelerated depreciation for up to 80% of the capital cost. Others include generation-based incentives which means that the central government will pay the power producer Rs 12 for every unit of electricity that is fed into the grid. Another part of the policy that is expected to be a key driver of solar generation is the fixed obligation of state utilities to purchase solar power from independent developers.
To be sure, the scaling-up of solar energy on such a massive scale is a risky undertaking. In this regard, India is arguably the global pioneer among developing countries. Critics argue that the money poured into this scheme could be better used to connect the rural poor to the existing grid infrastructure in order to connect them with a large-scale, conventional power source. But fossil fuel is quickly reaching its limits, both in terms of fuel availability and the environmental damage it causes. The Government of India has made the right move to place their bet on a cleaner, newer type of technology. Jeffrey Sachs argues in The End of Poverty that energy systems for remote rural areas are one of the essential elements for ending poverty. With the help of a forward-looking government and energy sector, Solar energy definitely has the potential to be such an element.
For more information on the JNNSM, visit: http://mnes.nic.in/pdf/mission-document-JNNSM.pdf