India's Budget 2010 puts Money where Mouth Is for Solar Energy

[bananas]

http://blogs.wsj.com/india-chief-mentor/2010/03/04/budget-2010-puts-money-where-mouth-is-for-solar-energy/

* March 4, 2010, 10:59 AM IST

Budget 2010 puts Money where Mouth Is for Solar Energy
By Ameet Shah and Sourabh Sen

The 2010-11 budget is great news for renewable energy, and in particular solar energy, in India. In November of last year, the Government of India took a major stride forward in driving sustainable development with the announcement of the National Solar Mission targeting 20,000MW of installed solar power by 2022. But the fact that they’ve now included it in the budget is a critical step.

While the NSM set the vision for solar in India, the Central Electricity Regulatory Commission’s tariff order laid out the details. These guidelines further strengthened the case for investing in the Indian solar sector by setting preferential feed-in-tariffs and declaring long term (25 year) power purchase agreements.

However, despite these important declarations, one of the common responses we continued to get from international investors when discussing the Indian solar sector is “Show me the money.” These groups want to see program funding before they commit capital. Well, now we can show it to them; in support of the NSM, the budget for the Ministry of New and Renewable Energy (the administrating entity) has been increased by 61 percent from Rs. 620 crore in 2009-10 to Rs. 1,000 crore in 2010-11.

In a previous post, we stated that the greatest promise of renewable energy lies in electrifying the masses. We’re very pleased to see the government explicitly recognize this promise with the Rs. 500 crore allocation to set up solar and small scale hydro projects in the Ladakh region of Jammu & Kashmir. To ensure India’s future growth is inclusive and sustainable, the government will also need to dedicate similar funding to additional locations such as Bihar and the Northeast with low rates of electrifications.

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[kristopher]

1. I have a good friend who is an energy analyst from India

I look forward to hearing his take on this. I'll share it after he comes to visit late this month.