Will India Surge Ahead Of The West In Renewable Energy?

by Hannah Green

This August, power shortages in India that left 300 million in the dark made it very clear that one of the world’s fastest growing economies was facing an energy crisis. Less clear is how realistically to solve it. Many firms are looking for new sources of oil to fulfill India’s growing energy demands, but this could prove to be painfully expensive.  On the brighter side, solar energy and other renewable resources are already being rapidly harnessed in the non-Western world, and they are becoming cheaper and cheaper.

As of June 2012, 31 percent of India’s energy came from renewable resources, including hydroelectric power, while only 9 percent of the United States’ did as of the end of 2011. In a 2009 McKinsey & Company survey, India was rated the top producer of solar energy in the world, just above the United States, with an annual yield of 1,700 to 1,900 kilowatt hours per kilowatt peak (kWh/KWp). However, demand for energy in India will only continue to grow, and the question is whether energy will continue to come mainly from fossil fuels or from renewable energy sources

Many hope so. Current local and imported supplies of gas and coal in India are insufficient to fulfill energy demands, and both investing in sufficient imported fossil fuels to keep India electrified or extracting new natural gas sources will hurt the Indian economy, according to a report by Boston Consulting Group. Hunting for shale gas is a risky and expensive venture, and creating Liquid Natural Gas facilities to ease the transport of imported oil would also require an investment of $12 – $25 billion. However, hydroelectric, wind, and solar power sectors are all growing. Hydroelectric power already accounts for 19 percent of India’s electricity, but at the moment less than half of available hydroelectric resources are being exploited.  Several solar power initiatives by state governments and the department of renewable resources are currently at work in India, the largest of which is the Jawarhal Nehru National Solar Mission, launched in 2010. The goal of the $19 billion plan is to harness 20,000 MW of grid power solar energy and 2000 MW of off-the-grid solar energy by 2020.

Part of the reason that solar power is becoming so affordable for India is that the demand for it is decreasing in the West. China’s solar power industry has recently faced an excess manufacturing capacity because of EU cutbacks on solar subsidies. That’s bad news for China, but good news for the Indian solar industry.

A report by the environmental research firm Clean Edge and non-profit Co-op America shows that 10 percent of United States energy could potentially come from solar power by 2025, but only a small fraction of that potential is actually in development.  Due to its larger land mass and smaller population, the United States has the potential to create much more solar energy than India does, and its energy demand continues to be much higher than India’s, despite having a quarter of India’s population. However, if current American and Indian government initiatives proceed as planned, the United States will likely continue to remain behind India as a producer of solar energy by 2030.

There are several reasons why renewable energy sources are growing faster in India in the short term than they are in the United States and Europe. India can’t afford to rely on expensive and unreliable fossil fuel imports the way that richer countries with solid infrastructure in place for traditional energy resources can. For rich countries to switch to renewable energy requires a choice: keep the infrastructure that’s in place and continue to use non-renewable energy (cheaper in the short term) or make the comparatively expensive switch to renewable energy.  In India, on the other hand, villages that are still off the grid have only to choose the option that is cheaper from the ground up.  It is often cheaper to install new solar energy plants than it is to connect to the existing grid in India. Thousands of Indian villages have already been newly electrified with solar power. In some villages that don’t yet have full electricity, small solar cells are a significantly cheaper and safer replacement for kerosene cells. Finally, other concerns, such as aesthetics, continue to impede the construction of renewable energy plants in the United States and Europe.  In India such things are given little consideration.

Countries that are making room for renewable energy now may well benefit in the long term. Recently there has been speculation as to whether India can keep up the rapid economic growth that has taken the world by storm in the past few years. It’s true that in the short term growth is slowing down. But long-term factors like energy blackouts, energy access, and global warming might eventually see India moving ahead once again. In coming years, leaders in renewable energy might not be those countries most capable of producing it, but those who can least afford not to.

Hannah Green covers economic and foreign policy issues, especially in South Asia and the Middle East.  She recently received her B.A. in history from Northwestern University, and is living Lucknow, India, where she studies Urdu and Hindi.

4 Responses to Will India Surge Ahead Of The West In Renewable Energy?

  1. Mike Roddy says:

    The bottom line from this post is that India is still committed to coal. 22 gigs by 2020 is way out of sync with what we need to do in order to transition to clean energy:

    Of course, Americans are in no position to make any demands on other countries until we
    wake up. That will be needed in order to put pressure on Tata, Reliance, and local coal and utility cartels.

    I worked in India in 1999, and found that the Indian people are very much in favor of solar- a US company called Solarex was building small pilot plants back in those days. A substantial carbon tax, charges for coal externalities, and rational policies from World Bank and IMF would be enough to drive change.

  2. catman306 says:

    I wonder what potential geothermal has on the Indian subcontinent?

  3. Manju says:

    Yes, I agree with Ms Green that India ,especially rural India has no option but to go solar.In urban India, We are seeing a growing trend,for big institutions, Infra structure builders,schools,Industrial Units etc ,also going for large scale solar installations .There is no option for urban Indians either, as there is acute shortage of conventional power and solar being a versatile renewable energy-it is gaining more popularity. offers a database of solar players and products that cover the entire value chain of solar power in India.This is to bring all fragmented information on solar power on a single platform for the benefit of people going for solar.

  4. Dr.A.Jagadeesh says:

    No doubt there is much hype for solar energy especially for power generation in India these days.

    Compared to Wind,Small Hydro Power,Bagasse Cogeneration Solar Power(SPV) is very much behind.

    Here are the Statistics:

    Cumulative achievements(as on 30 September 2012)
    Power from Renewables In MW
    A. Grid interactive power
    Wind Power 18191.85
    Small Hydro Power 3446.67
    Biomass Power 1226.60
    Bagasse Cogeneration 2132.73
    Waste to Power (Urban and Industrial) 93.68
    Solar Power (SPV) 1045.16
    Sub total (A) 26136.69
    B. Off grid/captive power
    Waste to energy 108.94
    Biomass (Non-Bagasse) Cogeneration 412.61
    Biomass Gasifier (Rural and Industrial) 154.30
    Aero-Generators/Hybrid Systems 1.74
    SPV Systems (>1 kW) 96.61
    Water Mills/Micro Hydel 2121 nos.
    Sub total (B) 774.20
    Total (A+B) 26910.89
    (Source MNRE,Akshay Urja Vol.6 Issue2, October2012)

    The Jawaharlal Nehru National Solar Mission was launched on the 11th January, 2010 by the Prime Minister. The Mission has set the ambitious target of deploying 20,000 MW of grid connected solar power by 2022 is aimed at reducing the cost of solar power generation in the country through (i) long term policy; (ii) large scale deployment goals; (iii) aggressive R&D; and (iv) domestic production of critical raw materials, components and products, as a result to achieve grid tariff parity by 2022. Mission will create an enabling policy framework to achieve this objective and make India a global leader in solar energy.

    In India there is much scope for expansion of Wind farms. India should go in for Offshore Wind Farms since it has long coast line of 7,517 km.

    Dr.A.Jagadeesh Nellore(AP),India