Can India Install 20 GW of Solar by 2020? Part 1

India Energy Inequality

In a first-of-its-kind plan, the Indian government announced the Jawaharlal Nehru National Solar Mission with the goal of achieving 20 GW of installed solar capacity by 2020. An incredible ambition, many are wondering if it is possible. There’s no denying that the country needs it, but is it possible to garner enough investment in solar to install 20 GW of capacity by 2020? We looked at several macroeconomic factors to determine the feasibility of the Jawaharlal Nehru National Solar Mission.

This mission comes as a direct response to the dire energy situation in India. Currently, about 35% of the population (over 400 million people [OECD/IEA, 2011]) lack grid access.  Even this low rate is likely underestimated as officials only require 10% of households in a village to have grid access to proclaim the village “electrified,” (Ministry of Power, India, 2009). With the population closing in on 1.2 billion and a growing middle class, electricity demand will continue to grow. A recent McKinsey report, “Powering India, The Road to 2017” (PDF), claims that India will at least need to triple its generation capacity by 2017 in order to keep up with demand.

A Solution?

The Jawaharlal solution seems ideal – take advantage of India’s 300 sunny days each year to increase installed solar capacity, close the power deficit, and keep carbon emissions low.

Unfortunately, there are significant barriers to overcome. Solar is expensive and requires a lot of investment and incentives. India with only 0.3 GW of installed solar capacity (BP, 2011) would have to increase capacity by over 65 times to reach the ambitious 20 GW goal.

A Reason for Optimism

Solar Resource Map of India via Wikimedia Commons

India is one of the world’s fastest growing economies with huge potential to develop its solar sector. It has a massive land area of over 3 million square kilometers and solar irradiance of between 5 and 7 kWh/m² for 300 days of the year. Therefore, the country has potential capacity for solar power of about 5 petawatt hours (pWh) per year (Maglin & Ramesh, 2011).

For comparison, we considered Germany’s potential for solar. Its current installed capacity is 25 GW (BP, 2011). Germany’s total potential for solar is around 0.3 petawatt hours as it’s a much smaller country with irradiance between 2 and 3 kWh/m² (Solar Feed-In Tariff, 2007). With twenty times Germany’s potential solar capacity per year in India, it’s reasonable to be optimistic that 20 GW may be added in the next eight years. However, optimism isn’t enough.

Putting the Goal to the Feasibility Test

We tested the feasibility of the Jawaharlal Nehru Solar Mission goal. To do so, we studied the inflow of capital, both public and private, the declining cost of solar, and the current generation capacity and energy usage. Our model projects future solar industry spending in India which, when combined with the unit cost of additional solar capacity, calculates the total generation capacity in India for a given year.

To estimate the expenditure on solar infrastructure in India through 2020, we used macroeconomic data from the World Bank and energy data from the BP Statistical Review. We estimated each factor individually using regression analysis for the figures in 2020 and compared them to industry estimates before deriving the final output. Then, we divided the annual expenditure on solar by the average cost per Watt to yield the size of the yearly increase in solar capacity.

After detailed analysis and discussion, we determined whether or not it will be possible to reach 20 GW of installed solar capacity by 2020 based on current trends.

Check back next week to see what we found out! Updated Tuesday, February 21, 2012: Read part 2 here.

Works Cited:
BP Statistical Review. 2011. Site.
Maglin & Ramesh. “Power Quality Issues in Solar Converters: A Review.” European Journal of Scientific Research. 2011. PDF.
McKinsey & Company. “Powering India: The Road to 2017.” 2010. PDF.
OECD/IEA. “World Energy Outlook 2011.” PDF.
PVGIS European Communities. “Solar Feed-In Tariff.” 2007. Site.