By Mahesh Bhave, Indian Institute of Management

India’s recent electric grid failure on July 30 and 31 has been determined the world’s largest blackout. This event will no doubt spur some movement toward efficiency and discipline. India requires new and innovative thinking and effectiveness through structural change. This is also the time to focus on renewable energy, particularly solar photovoltaics.

“India is the Saudi Arabia of renewable energy sources and, if properly utilized, India can realize its place in the world as a great power,” said Jeremy Rifkin, an economist and activist, in New Delhi in January, “but political will is required for the eventual shift from fossil fuels to renewable energy.”

Even if 10% of India’s energy needs can be met by solar, it would be a huge contribution in taking the edge off peak load on the existing grid.

Solar panel prices have dropped by over 50% during the past year, and those of the supporting hardware — including cables, connectors, inverters — will continue to drop at a slower rate. Overall, system prices now are practically at “grid parity” — the price per unit of electricity is comparable to the price of coal-based power. This is especially the case when the costs of greenhouse gas emissions from burning coal, an “externality” until now, are taken into account. And we are even closer to grid parity when the average price includes the unsubsidized cost of diesel-based generation, frequently used when power fails.

The attributes of the two kinds of electricity are different, however — one is polluting and causes global warming, the other is clean. One is continuous, and the other is intermittent. Yet the two can work with synergy, as net metering solutions work in the U.S. The “edge” solar power generating households contribute excess power to the grid during sunny days and draw from the grid when the sun does not shine. The net electricity bill for a solar power-generating household can be zero.

In India, not only can solar generation work as a complement to the grid as above, but it can also alleviate having 400 million citizens without electricity. In the age of smartphones, broadband, HD televisions and microwaves, this absence seems hard to believe. Many of these people live in rural areas where grid extension is not economical; solar energy for self-sufficiency is one immediate and affordable solution.

What are the costs of electricity’s absence? Lost opportunities for augmenting livelihood, children forced to study by candlelight or kerosene lamps, or not at all.

There are several solar energy solutions. The Ministry of New and Renewable Energy is mostly focused on using solar energy, like any other fuel source, to feed the grid. Typically, this is through concentrated solar solutions, and recently through photovoltaic panels due to price drops. Solutions that feed power to the grid are important, but they only augment an over-stressed grid — they do not help the millions without any grid power. The Ministry mostly ignores distributed generation, the solar self-sufficiency solutions like rooftop panels or community grids.

Clean energy technologies are in the middle of unprecedented innovations. Bloomberg New Energy Finance studies show the patent growth in this space has accelerated so much that, around 2005, clean energy patents surpassed the patents generated in all other technologies combined.

India can be a part of this innovation boom, but not unless the government gets out of the way. Innovations cannot be a command performance, wished into being by government fiat. Incentives and regulations can help, but not the creation of one more Government of India “undertaking,” or the creation of an Innovation Council comprised of distinguished people, but with an agenda that does not include renewable energy.

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