The recently concluded REINVEST meet at Gandhinagar was ambition personified; it raked in a slew of renewable energy investment proposals, amounting to $386 billion and a capacity creation of 570 GW in solar power (₹32.45 lakh crore) by 2030. Those lining up to invest include Reliance Industries (100 GW), ReNew Private Ltd (41 GW), Adani Green Ventures (39 GW), NTPC (41 GW), Tata Power (15 GW), SECI (10 GW), Hero Future Energies (30 GW), and several others.

To place this resolve in perspective, India has a non-fossil fuel capacity of 207 GW (including hydel and nuclear power) and over 150 GW essentially comprising solar and wind power. Going by the recent meet, achieving the global commitment of 500 GW of non-fossil fuel capacity by 2030 seems easy even as current solar capacity stands at 89 GW. However, annual additions of 10-15 GW will have to be ramped up multiple times to get to India’s estimated solar potential of 749 GW. The investment interest comes at a time when India’s solar sector is once again seeing some churn. India’s production linked incentives for solar cells and modules, accompanied by a hike in tariffs, have resulted in a drop in imports from China, serving India’s strategic interests well. Besides, a demand impetus has also been introduced with effect from April this year, which lists out a panel of suppliers for government sponsored solar projects. These empanelled producers are likely to be at the forefront in evincing investment interest. This list is called Approved List of Models and Manufacturers (ALMM).

On imports from China, a reply to Rajya Sabha (August 8) question on solar imports, reported in this newspaper, explains the situation. China’s share in imports of solar cells and modules has fallen from nearly 90 per cent in FY22 ($4 billion out of $4.5 billion) to 62 per cent ($3.9 billion out of $6.2 billion) in FY24. The trend has sustained this fiscal. A September 7 notification by the Ministry of Renewable Energy says that an ALMM list for solar cells (the existing one pertains to modules) is being drawn up. The ALMM push, abandoned in the Covid years owing to the supply shock, has been reintroduced at a time when domestic capacities are improving. However, the selection of companies as well as allocation of land must be done transparently. Finances, be it ‘green’ equity or bonds, including multilateral credit, must be similarly organised.

The solar push is perhaps more about geopolitics than economics. Indeed, India’s solar protectionism coincides with falling module and even battery prices worldwide, which could increase domestic power costs. Domestic module prices at about ₹22 per Watt peak, are higher than Chinese prices of ₹15 per Wp. Likewise ‘stationary’ lithium ion battery prices have fallen from close to $400 per kWh in 2017 to about $150/KWh now. But a high solar capacity will boost energy security. India can emerge as a hub for module and cell production at a time when the US and others are looking at alternatives to China. Solar is a long-term bet.