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India’s Energy Targets Achieved by China?

June 5, 2017 | Expert Insights

As India trails its journey towards a renewable energy program, the Country’s biggest solar equipment makers are undergoing a financial loss because the manufacturers are unable to compete with Chinese manufacturers. The ‘Jawaharlal Nehru National Solar Mission’ (JNNSM) also known as the ‘National Solar Mission’ is a program that was reinstated in 2010, to increase the solar power generation of the country in attempts for developing sustainable energy. 

Background

In 2010, the solar mission aimed to reach 20 GW in 2022 which was revised by the Narendra Modi government in 2015 to reach 100 GW by 2022, the reason for increasing energy generation capacity by 5 times is to make ‘India a global energy leader’

In order to achieve this ambitious goal, the government would have to install rooftop solar electricity generation and medium and large grid-connected solar projects. The government mentioned that a ‘capital subsidy’ would be allotted for this purpose. 

Analysis

Ambitious targets are always a good way to build momentum towards development, however proper infrastructure needs to be the focal point in this project. Energy security in the long term can only be achieved when domestic solar manufacturing is established in the Country. This would also help create jobs directly and indirectly in skilled and unskilled sector as technology hubs and manufacturing industries are established in the Country. However, as the Chinese companies are outrunning Indians with cost-effective pricing, the Country is now no longer relying on its own domestic capacities which has led many to question the government’s obligation to its ‘make in India’ project.

Is the Government doing justice to the ‘Make in India’ project?

Narendra Modi’s government chooses ‘cheap power’ over local manufacturing, giving preference to foreign companies. Chinese companies are selling solar cells at 35% below the production cost of Indian companies, therefore outbidding them. The Chinese solar product makers who are facing an overproduction in their own Country and high duties in Europe are given opportunity in the Indian market which has so far created a ‘multi-billion-dollar-market’ for them. Going by this development, the Chinese companies could earn $10 billion from $2 billion (currently earning) in the next few years, marking serious growth and profit for them while Indian companies strive to compete.

While the government should follow through with cost-effective schemes to ensure optimal benefits for obtaining energy security, it should also take into account the ways by which it attempts to achieve this. Downplaying Indian manufacturers for efficient Chinese technology might not be the best trade off in the long run. Developments and goals such as ‘energy security’ must be achieved with least dependency on outside manufacturing which is what the ‘make in India’ initiative embeds upon.