India plans 55 per cent subsidy on solar installations for homes and offices

India will provide a 55 per cent subsidy on solar power installations for homes and offices, according to a senior government official.

The subsidy will come from the $22bn (£13.4bn) that the federal government plans to budget for solar power development to 2030, Farooq Abdullah, minister of new and renewable energy, told India’s Economic Times newspaper yesterday.

He said the subsidy would help drive solar installations, resulting in greater economies of scale for solar cell and panel makers. As a result, manufacturers would be able to drop prices.

Both initiatives are part of India’s National Solar Mission, an ambitious scheme aimed at having 200GW of installed capacity by 2050, up from the current 3MW.

The mission is slated to be launched on 14 November, Abdullah said. He did not say when the solar subsidy would take effect.

In recent months, the mission has come under international scrutiny, with some analysts believing that the government will rely heavily on funding from western nations to achieve its targets.

Abdullah acknowledged that foreign help will be needed if India is to realise its goal.
Solar energy “is one avenue of power that remains underexplored in India”, he told the Economic Times. “In order to make advances in solar power, we are in talks with western countries like the US, Spain and Germany for free technology transfers.”

Abdullah added that “free technology transfers will attract conditions, of course. We are trying to work those out.” He did not elaborate on the terms being discussed.

India has about nine solar cell manufacturers and around 20 module manufacturers. However, it lacks wafer manufacturing capacity and a domestic supplier of polysilicon.

For its part, India is likely to offer financial incentives to overseas companies, many of which “were finding it difficult to get loans to set up [alternative] energy production plants”, Abdullah told the Times of India newspaper yesterday. “My ministry will ensure that the difficulty is removed,” he added.