U.S. Solar Firm Commits $4 Billion And 5 Gigawatts Of Solar In Major Deals With India

CREDIT: flickr/ American Center Mumbai

India is a country of big numbers. Nearly 1.3 billion people; more than 400 million of them don’t have electricity. Narendra Modi, India’s recently elected populist prime minister, has made providing power, even if just one lightbulb’s worth, to these wanting citizens during his term a priority. While Modi is pursuing all avenues of power creation — India’s coal union went on strike last week to protest opening the sector to international firms — he has been an outspoken advocate of renewable energy, especially solar. In the last decade India’s renewable energy capacity has gone from just under 4 gigawatts to over 27 gigawatts, much of it wind or hydro. The country has a goal of installing 10 gigawatts of solar by 2017 and 20 by 2022.

On Monday, the country took another stride toward these goals through two deals with the large U.S.-based solar company SunEdison. In dual announcements, SunEdison revealed that it signed two memorandums of understanding with India: to develop five gigawatts of renewable energy within five years in the southern Indian state of Karnataka and to build a $4 billion solar manufacturing facility as a joint venture with Adani Enterprises, a large Indian power operator. According to the press release, it will be the largest manufacturing facility of its kind in India, with an annual production capacity of 7.5 gigawatts.

“This facility will create ultra-low cost solar panels that will enable us to produce electricity so cost effectively it can compete head to head, unsubsidized and without incentives, with fossil fuels,” said Ahmad Chatila, President and Chief Executive Officer of SunEdison, in a statement.

The facility, which will create 4,500 direct jobs and over 15,000 indirect jobs, will be based in the north Indian state of Gujarat. Before becoming prime minister, Modi was Chief Minister of Gujarat where he helped grow the state’s nascent solar industry. Now as prime minister, Modi has turned his eye to the country’s overall solar industry, saying that he wants foreign companies to lead investment of over $100 billion to help push India’s solar energy capacity to 100 gigawatts, some 33 times what it is now. SunEdison and other major international solar firms are being drawn in by Modi’s enthusiasm and the country’s overall potential.

“The world of solar has dramatically changed. Two years back you depended on selling solar into developed countries because of their interest in dealing with climate change,” said Pashupathy Shankar Gopalan, SunEdison’s president of Asia Pacific. “Today the economics of solar is such that we are starting to build large projects that don’t need (government) incentives.”

U.S. Secretary of State John Kerry traveled to India earlier this week to lay the groundwork for President Obama’s visit at the end of January. Ever since the U.S. and China announced their bilateral energy and climate pledge in October there have been rumblings that a similar agreement could emerge between the U.S. and India. With the pledge China committed to getting 20 percent of its energy from non-fossil-fuel sources by 2030, and to peak its overall carbon dioxide emissions by the same year.

While India and the U.S. are working together on a number of initiatives such as micro-grid development and air pollution monitoring, a statement of such global significance as the U.S.-China pact is unlikely. India is the world’s third-largest emitter of GHGs and as the country’s economy rapidly expands emissions will continue to rise steadily and even sharply in coming years. Still, the average Indian’s carbon footprint is about ten percent the size of the average American’s.