The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post
Pratikshit Gupta, MBA 2015-17, Vinod Gupta School of Management, IIT Kharagpur
The Madhya Pradesh Government has inked a pact with International Financial Corporation (IFC), a member of the World Bank Group to set up a solar energy plant with a capacity of 750 MW. The power plant is set to be the world’s largest single site solar energy plant and will be set up in Gurh tehsil of Rewa district spreading over an area of 1,500 hectares at an estimated cost of Rs 4,500 crore.
Successful implementation of the power project will help in moving a step forward towards realizing the goal of 100GW solar power by 2022. The current government had revised the target of 22GW set by the previous government citing dramatic decline in the solar power cost from Rs. 20 to Rs. 5.5 and the price further declining.
There have been many other developments which also help in moving towards the goal of 100GW solar energy. Investments have been pouring in from across the globe for projects in India. The Ministry of New & Renewable Energy (MNRE) recently announced that the World Bank, the Asian Development Bank, and the newly-founded BRICS development bank will provide $500 million each for development of rooftop solar power projects in the country.
India is expected to add 2000MW solar capacity in January-March with the help major projects in Andhra Pradesh and Telangana.
However, Investors feel that the tariff being aggressive and taking into account a whole host of operating and policy risks in India There is a fear that some of the developers looking at investing in India may be put off by the Indian market due to the unviable tariffs and returns. Questions are also being raised about the sustainability of such low rates— whether the firms would compromise on quality or returns.
India, being a tropical country, has a huge potential to develop in solar energy. Also with the signing of Paris Deal in December last year, India can show the way forward to other countries and strengthen its stand on the reduction of fossil fuel and promote clean energy.