India will unveil its first solar power target as soon as September, pledging to boost output from near zero to 20 gigawatts (GW) by 2020 as it firms up its national plan to fight global warming, draft documents show.
The target, which would help India close the gap on solar front-runners like China, is part of an ambitious $19 billion, 30-year scheme that could increase India's leverage in international talks for a new U.N. climate pact in December, one of several measures meant to help cut emissions.
If fully implemented, solar power would be equivalent to one-eighth of India's current installed power base, helping the world's fourth-largest emitter of planet-warming greenhouse gas emissions limit its heavy reliance on dirty coal and assuaging the nagging power deficit that has crimped its growth.
The "National Solar Mission", yet to be formally adopted by Prime Minister Manmohan Singh's special panel on climate, envisages the creation of a statutory solar authority that would make it mandatory for states to buy some solar power, according to a draft of the plan, which provided detailed proposals for the first time, obtained by Reuters, "The aspiration is to ensure large-scale deployment of solar generated power for both grid connected as well as distributed and decentralised off-grid provision of commercial energy services," the policy draft said.
Confirming the proposed plan, a top Indian climate official told Reuters that the mission contained "quite stiff" targets that could be announced in September. In June a senior climate official had hoped it could be submitted this month.
"The draft should not change much and the target of 20 GW will be there," the official said on condition of anonymity because the issue was still under discussion.
Money would be spent on incentives for production and installation as well research and development, and the plan offers financial incentives and tax holidays for utilities.
It envisions three phases starting with 1-1.5 GW by 2012 along with steps to drive down production costs of solar panels and spur domestic manufacturing. The world now produces about 14 gigawatts (GW) of solar power, about half of it added last year.
The move could unlock India's huge renewables potential and benefit companies such as Tata BP Solar, a joint venture between Tata Power and BP plc's solar unit, BP Solar, and Bharat Heavy Electricals Ltd, a state-run power and engineering equipment firm, and Lanco Infratech.
Shares in Chinese solar equipment firms like Suntech Power Holdings and Trina Solar have tripled since March, when Beijing first announced subsidies; Beijing is widely expected soon to raise its solar target to up to 20 GW by 2020.
Japan is targetting 28 GW of solar power by 2020.
India's climate plan released last year identified harnessing renewable energy, such as solar power, and energy efficiency as central to its fight against global warming. At the moment only about 8 percent of India's total power mix is from renewables, although it is a leading provider of wind power technology.
Experts say the voluntary domestic action will add to India's bargaining power in international negotiations, although India's refusal to commit to any binding emission targets has angered many rich countries demanding greater commitment.
"Such unilateral action will give India the moral high-ground because the rich countries have not committed to anything (in terms of finance and technology)," said Siddharth Pathak, Greenpeace India's chief climate campaigner.
Nearly 200 countries meet in Copenhagen in December to try to agree on a broader climate pact to replace the U.N.'s Kyoto Protocol, whose first phase ends in 2012.
The draft policy document estimated that India could cut about 42 million tonnes of carbon dioxide emissions with its new solar plan, which aims to provide access to solar-powered lighting for 3 million households by 2012.
The plan is to make the use of solar-powered equipment and applications mandatory for hospitals, hotels and government buildings, and encourage use of solar lighting systems in villages and small towns with micro financing.
The plan also outlines a system of paying households for any surplus power from solar panels fed back into the grid.
India's long-neglected power sector is regarded by many observers as the greatest infrastructure investment opportunity in a country where nearly 56 percent of the 1.1-billion plus population do not have access to electricity.
In spite of its pledge to clean technology, coal remains the backbone of India's power sector -- accounting for about 60 percent of generation -- with the government planning to add 78.7 GW of power generation during the five years ending March 2012. Of this, 15.1 GW has been commissioned.
In comparison, China's power generation capacity rose to 792.5 GW in 2008, more than five times India's capacity.
India says it must use more energy to lift its population from poverty and that its per-capita emissions are a fraction of those in rich nations, which have burned fossil fuels unhindered since the industrial revolution.
India, whose economy has grown by 8-9 percent annually in recent years, contributes around 4 percent of global greenhouse gas emissions.