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As political parties prepare for another round of animated (and hopefully productive) debate on the pros and cons of the India-US  nuclear deal, I want to draw attention to the recent positive efforts of the MNRE towards developing the solar energy sector in India.

In an effort to provide electricity to rural households in the country, the ministry of new and renewable energy (MNRE) has decided to provide a generation-based incentive of Rs 12 per kilo watt hour for electricity generated from solar photovoltaic and a maximum of Rs 10 per kWh for electricity generated through solar thermal power plants and fed to the grid from a grid interactive solar power plant of 1 mega watt and above. The grid interactive power plants will be set up on build own and operate model. Each state would be allowed to add 10 MW aggregate capacity under the government's scheme.

The ministry has decided to provide these incentives in view of high capital costs of developing solar energy projects. Unit cost of generating electricity from solar photo-voltaic systems is pegged at Rs 15 per kilowatt (solar photo voltaic power). Though this scheme does not put to end the debate on economic viability of solar energy projects (especially SPV), it certainly makes a case for commercially developing such initiatives.

The largest photovoltaic plant in the country so far is about 200 kWp capacity. India receives solar energy equivalent to 5,000 trillion KWh per year. The daily average of solar energy received over different parts of the country varies from 4-7 kWh per square meter depending on the location.

Hopefully this scheme will improve incremental capacity addition in the solar energy arena.

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