Around the world billions of dollars are being invested in solar energy technologies.

G. Chandrashekhar

Mumbai, July 16 Energy crunch has begun to stare India Inc in the face. Admittedly, energy is a critical input that fuels growth. If not addressed urgently, energy insecurity can potentially create a serious downside risk to the economy in the coming years. This recognition is sinking in.

According to a Business Line report (dated July 14), many corporates have planned investments aggregating Rs 50,000 crore in the solar photovoltaic industry. This is not surprising as the trend around the world suggests increasing interest in this renewable form of energy that is eco-friendly too.

The PV industry, especially in Europe (led by Germany), is making great strides in efficiency and cost, bringing solar power closer to price parity with fossil fuels, according to experts. In 2007, global production of solar photovoltaic (PV) cells increased by a 51 per cent to 3,733 MW.

According to estimates, more than 2,935 MW of solar modules were installed last year, bringing cumulative global installations of PVs since 1996 to more than 9,740 MW — enough to meet the annual electricity demand of more than three million homes in Europe.

This was revealed in a recent report from the Washington-based Worldwatch Institute and Prometheus Institute of Cambridge, Massachusetts. While Europe surpassed Japan to lead the world in solar cell manufacturing, Germany is the world leader in solar PV installations, accounting for almost half the world total in 2007 and employing about 40,000 people.

Government policies guarantee high payments for solar power fed into electricity grid. After Germany, Spain ranked second in total installations in 2007, driven by strong guaranteed price for PV electricity.

According to the report, China raced past the US for PV cell manufacturing in 2006 to be third globally, and now ranks second only to Japan in national production. In the last two years, China’s PV production increased more than six-fold to 820 MW in 2007. However, much of PV cells made in China are exported to Europe.

Around the world billions of dollars are being invested in solar energy technologies. Solar PV prices declined slightly in 2007, with even greater reductions held back by the hot pace of demand and a continued shortage of polysilicon, an essential ingredient for conventional solar cells.

Analysts expect more price drops — perhaps as much as 50 per cent in the next two years — as polysilicon becomes easily available, production and installation are further scaled up, manufacturing efficiencies increase and more advanced technologies are introduced.

“Solar electricity could soon be a competitive alternative to conventional retail power in many regions,” the report asserted adding climate change has added a new urgency to accelerated development of renewable energy.

The Indian government through the Ministry of New and Renewable Energy has drawn up ambitious plans to tap the potential for generating solar power.

For solar energy programmes, fund releases have accelerated. In 2007-08, it amounted to Rs 77 crore, up from Rs 74 crore in the previous year and Rs 58 crore in 2005-06.

Maharashtra, Rajasthan, Meghalaya and Uttarakhand are major beneficiaries. Renewable energy is expected to play an important role in future. Corporate India has a job cut out. It is business and corporate social responsibility as well.

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