As recently as a few months ago, the alternative energy targets announced by Indian prime minister Narendra Modi’s government in 2014 seemed wildly overambitious — even to solar electricity enthusiasts in the industry. But a surge of investment in solar power stations now makes them look merely optimistic.
“In 2009, when I said that India would have two to three gigawatts [of solar energy] by 2015, people said ‘That’s not possible’,” says Inderpreet Wadhwa, founder and chief executive of Azure Power, one of the country’s biggest producers. “Today we have 5GW running.” Mr Wadhwa left a technology career in California after he came home to India on what was supposed to be a short personal trip eight years ago and saw the “huge” opportunities presented by the shortage of electricity.
He started with small solar plants for electricity-hungry districts and rooftop systems for companies to replace costly diesel generators. Today, Azure Power — which is part-owned by the World Bank’s International Finance Corporation as well as Foundation Capital and Helion Ventures and is poised for an initial public offering — is one of dozens of domestic and international investors putting money into building or supplying equipment to large-scale solar photovoltaic power stations across India.
Mr Modi has championed solar power and helped launch a global solar alliance at the Paris climate summit to mobilise an attention-grabbing $1tn of funds worldwide by 2030.
India itself, with current electricity grid capacity of less than 300 gigawatts, aims to increase its solar installations from below 5GW now to 100GW by 2022 — more than double the present solar capacity of China and Germany, the two biggest solar nations.
The latest contract awards suggest that, in sunny India at least, solar power can compete head-on with coal in terms of price, albeit not in terms of 24-hour availability.
SB Energy — a joint venture between Japan’s SoftBank (which has promised 20GW or $20bn of solar investment in India), Bharti Enterprises of India and Foxconn of Taiwan — last month won a reverse auction for a 25-year, 350MW project in Andhra Pradesh.
The price of the electricity to be sold, Rs4.63 per kilowatt hour, equalled the record-low winning bid of SunEdison, the struggling US group, for a 500MW project auctioned earlier in the same state.
That price, says Mr Wadhwa, is cheaper than for the power to be supplied by recently auctioned projects using imported coal. “Maybe another year, and you’ll be cheaper than new domestic coal projects as well,” he says, noting that Indian conglomerates with interests in coal are now among the active bidders for solar plants.