The World Bank’s agreement with the India-led International Solar Alliance (ISA) to help it mobilise a trillion dollars in investments by 2030 and its billion-dollar programme to support Indian initiatives for expanded solar generation are significant steps in the global transition to a clean energy pathway. While the cost of solar power has been declining, one of the biggest obstacles to a scale-up in developing countries has been the high cost of finance for photovoltaic projects. That problem can be addressed by the ISA through the World Bank partnership, as the agreement will help develop financing instruments, reduce hedging costs and currency risks, and enable technology transfer. India has raised its ambitions five-fold since the time it launched the National Solar Mission, and the target now is an installed capacity of 100 gigawatts by 2022 out of a total of 175 GW from all renewables. Strong policy support is also necessary to improve domestic manufacture of solar cells and panels, which has remained unattractive because cheap imports are available. India’s efforts have also suffered a setback, with the adverse WTO ruling against the stipulation of a prescribed level of domestic content for solar projects. Developing a strong solar manufacturing industry is essential for sustained economic growth, and to connect those who never had the boon of electricity.
Support from the World Bank for large-scale and rooftop solar deployments, innovative and hybrid technologies, and storage and transmission lines presents an opportunity for India to go the German way and achieve energiewende, or energy transition. For instance, the $625-million grid-connected rooftop solar fund could help strengthen State-level programmes for net metering. A transparent regime that enables individuals and communities to plug into the grid without bureaucratic hurdles would unlock small-scale private investment. There are several pointers from Germany’s experience as a leading solar- and wind-powered nation to prepare for a major ramping up of these green sources. Arguably, the strength and reliability of a power grid capable of handling more power than is available are fundamental to induct higher levels of renewable power. The emphasis here must also be on improving transmission lines: the World Bank programme promises to provide the necessary linkage to solar-rich States. Making power grids intelligent to analyse and give priority to use the output of renewables, accurately forecast the weather to plan next day generation, and viability mechanisms for conventional coal-based plants are other aspects that need attention. Innovation in battery technology is a potential gold mine for the solar alliance and for India to exploit.
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