Factors That Facilitated The Growth Of Solar Energy In India

Posted by chandni on January 17th, 2020

Renewable energy is establishing itself as the technology of choice for power generation globally. India is currently emerging as a country where solar energy harnessing incurs the lowest costs. It reflects an ongoing shift towards renewable power, particularly solar energy as the driver of global energy transformation. India is maximizing the fall in the costs of renewable energy sources and utilizing it as the key to reducing the use of fossil fuels as much as possible. Everyone knows that renewable energy sources have significant benefits to offer to the environment including carbon emission reduction. It will also aid the battle against climate change. So, what allowed India to become one of the cheapest producers of solar energy in the world?

The government’s role

The government, as well as companies like Mahindra Teqo, supported the uprising of solar energy in India. Specialized bodies such as the Ministry of New and Renewable Energy and Solar Energy Corporation of India came into existence to play a pivotal role to help India become one of the fastest adopters of solar power. Along with the implementation of policies, aggressive objectives, and streamlined efforts, the subcontinent became the fifth largest installer of solar energy harnessing devices. The government launched the National Solar Mission back in 2010. The price of solar energy per unit used to be Rs 17/-. Now, commoners can use solar energy at Rs. 2.44/- per unit.

Policies and incentives

The government of India has been providing subsidies and incentives ever since the appearance of the Jawaharlal Nehru National Solar Mission. It proved to be instrumental in the adoption of solar energy. Of course, companies like Mahindra Teqo also played a crucial role to educate people about the importance and benefits of using solar energy in India. The segments that experienced rapid growth include open-access solar farms and utility-scale industries. Rooftop solar installations for residential purposes soon followed them. A few of the key tab incentives that contributed to the growth of solar power are the Accelerated Depreciation Benefit and tax holidays.

Certainty about land

Land acquisition for development has always been a significant issue in India, and historical events proved it. This problem with the land acquisition also leads to cost escalation in infrastructural projects. The cost of land generally constitutes around seven percent of a large scale solar energy generation project. That is why the central government introduced guidelines that would lead state governments to identify suitable tracts of land with the right insolation levels. They even allowed the use of wastelands to increase the speed of the acquisition process and set up solar parks. One of the reasons that contributed to the drop in solar power prices is the obliteration of the uncertainties with land acquisition.

Reduced labor costs

India offers the lowest costs in terms of labor. This feature allowed the solar industry to employ a massive number of people that facilitated in completing projects swiftly and at nominal expenses. For instance, the cost of labor in the Middle Eastern countries is five times more than that in the subcontinent. That is the solar industry leveraged this availability of affordable labor to offer the lowest consumption costs to consumers while creating ample job opportunities in the process.