India as 'Renewable Energy Manufacturing Hub'

Foreign invasion on India's National Solar Mission (JNNSM) is in news for quite some time now, essentially on account of the fact that most of the installations under JNNSM or States' solar programmes have used imported solar photovoltaic (SPV) modules rendering the existing Indian capacity idle. Given the fact that enhancing indigenous solar manufacturing capacity in one of the stated goals of JNNSM, Ministry of New and Renewable Energy (MNRE) has proposed minimum Domestic Content Requirement (DCR) for all the solar projects. This pitches project developers against Indian solar manufacturers, the reason being aggressive bidding on tariff that the developers do to win these coveted projects. And such lower tariff cannot be sustained with the more expensive Indian products whereas the imported ones, mainly from China, give them that competitive edge.

So, at this juncture what is required is to go deeper into this problem rather than going in for short term measures like DCR. One cannot wish for very low RE tariff with the wares that do not pass the test of competiveness. And that is the crux of the matter. While we have done commendable job insofar as deployment of renewable energy technologies (RETs) are concerned, the manufacturing industry has largely been left to fend for itself. And this is not limited to solar industry alone. While JNNSM came out with various schemes for capacity addition in terms of generation, any serious policy push for manufacturing sector in still a missing link.

Contrast this to China where the State is there at each and every step of promoting domestic manufacturing sector starting from low-cost capital moving on to easy clearances and a host of other concessions. Their vision is not only to serve the domestic markets, but more importantly, to have an industrial base that can compete and capture the global markets. But even after more than three decades of RE programmes in India, we have yet to aspire for that global vision and in absence of any such goal; there is no question of having a visionary renewable energy industrial policy. Indeed, many homegrown renewable energy technologies - developed in the country over years such as solar water heating systems, biomass gasifiers, hybrid cooling systems, improved cookstoves, and solar lighting devices; to name a few - have great relevance to developing countries. When we talk about "green" economy and green jobs being created through clean energy interventions, the fact to be realized is that they largely come through such an industrial base and we have many European countries as example besides China. This requires policy support and hand holding along the complete value chain including the ancillary industry. With the scales and in-built frugality at each step, not only the domestic demand can be met much more economically - thereby reducing the need of subsidies to the sector - we also stand to compete successfully globally bringing in precious foreign exchange as well.

For such a base to evolve, we will have to focus on complete eco-system ranging from human resource development to indigenous research and innovation to testing and certification to financing and incentives. This also calls for looking in to complete gamut including development of our research as well as other support infrastructure to meet the global norms, wherever required through international collaborations.

One may look at the kind of support provided to our software and ITES sectors to make them truly global in nature. These not only enabled these companies to be competitive in the international marketplace but also helped develop a very robust backend industry. Along the same lines, there is an urgent need to shape India as a "Renewable Energy Hub" for the world, especially focusing on the emerging opportunities in the developing world. A few years ago ambitious plans were announced for setting up of special economic zone for manufacture of renewable energy equipment but nothing concrete has happened so far. The need, therefore, is to give this concept a serious though at the highest government levels. Our existing network of micro, small and medium enterprises can be remoulded to service main industrial hubs after modernizing them to meet global levels of quality as well as resource efficiency. This is truly a sunrise sector where India has potential to build quickly on its substantial experience particularly around decentralized technologies.

Tags: renewable energy hub, India's national solar mission, green jobs, green economy, developing world