(Online Course) GS Concepts : Energy – Jawaharlal Nehru National Solar Mission

Subject : Environment
Chapter : Energy

Topic: Jawaharlal Nehru National Solar


The Jawaharlal Nehru National Solar Mission (JNNSM) was
launched by the Prime Minister, on January 11, 2010, under the National Action
Plan for Climate Change (NAPCC) with the aim of promoting an eco friendly and
sustainable growth while marching towards energy security for the nation and
enhancing India’s contribution to meet the global challenge of climate change.
It aims at establishing India as a world leader in solar energy by creating
policy conditions conducive to stimulate investments in installation and R&D.

India is an energy starved country whose economy is growing
at a breakneck speed. The current installed generation capacity is about 162 GW
which, with high T&D losses, translates into a peak time shortage of 12.7% and
this is the situation when more than 400 million Indians still don’t have access
to electricity. India currently faces a threefold challenge of meeting the
current demand, fighting climate change and attaining energy security. This
implies that nuclear power and renewables would play a very crucial role in
India. India unfortunately has very limited potential for wind power and that
for geothermal is still unknown, but luckily India gets good sun fall almost all
through the year. Solar power in India has huge potential and it is environment
friendly as it has zero emissions while generating and is obviously the most

Importance and Relevance of Solar Power in India

Cost of power: The solar panels available in the market today
are very costly which makes the initial investment required very high, which in
turn makes it prohibitive in a poor country like India. JNNSM aims at bringing
this cost of power to grid parity by 2022 and at par with coal based power
plants by 2030. But this would require global investments in R&D at a very large
scale. Although it is a costly alternative for now, but going forward, with the
progress in technology its cost will come down. Contrasting this aspect of solar
with that of coal makes it a clear favourite as the cost of producing
electricity using coal will only go higher as mineral reserves deplete in India
and then we would be forced to import most of the total requirement, which will
come a further higher price. Couple these with some major investments in
developing the required infrastructure for importing coal and the transportation
cost involved and we get to understand that solar has now become is inevitable.

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Scalability: India is blessed with a huge and still untapped
potential in terms of solar power as it receives high insolation. We get about
300 clear and bright sunny days per year, receive 4-7 kWh per square meter per
year i.e. 1500-1700 kWh/m2/p.a. adding upto 5 zillion kWh per year. This
potential, even at 10% conversion rate would mean an availability which is many
times more than what India may need. The only concern regarding scalability is
the availability of space as megawatt size plants occupy a lot of land. The size
of land may vary according to the intensity of sun in the area of the plant (as
per an estimate by Tata BP Solar, generating 100 MW in Delhi would require about
500 acres of land for much less in Rajasthan). The following solar map shows the
region wise levels of insolation in India.

A Distributed Source of Energy: The solar form of
energy provides the opportunity to generate power on a distributed basis
enabling rapid generating capacity addition with very short lead times. It
becomes much more important in case of countries like India which have poor T&D

Reaching Out to the Rural India: Solar power is very
useful especially from the rural electrification point of view. In India,
hundreds of millions of rural consumers are still not connected to the grid, and
ones connected either don’t receive quality supply or get no supply at all.
Solar power has the capacity to completely revolutionize the prevalent scenario
and change the living standards in the remote villages of India by efficiently
meeting the electricity and heating needs of the people out there.

Environmental Impact: The best thing about solar is
that it’s environmentally benign as it produces no carbon or greenhouse gases or
any other toxic waste while generating, doesn’t burn oil, coal or gas to
generated electricity. In addition to these, at solar power plants there are no
chances of an environ-mentally devastating accident. In fact, the only pollutant
which factors into solar power are those involved in the construction and
transportation of its component parts.

Security of Source: Energy security is very high on
our national agenda and we are working very hard with our global partners to
diversify the source of the resources that we use to generate the requisite
amount of energy to run our economy. Solar is the most secure of all known
resources. It may not be the cheapest source of energy as of now, unlike coal,
but it is, and will always be, available in abundance and is waiting to be
exploited. It is one source of energy we will never run out of, one source of
energy which will always be available with us irrespective of how the
geopolitics changes.

Objectives and Targets

The objective of JNNSM is to transform India into a global
leader in solar power by spreading awareness and promoting investments with the
help of policies which encourage such initiatives. The National Solar Mission
has set a target of generating 22,000 MW in 3 phases, 20,000 MW for
grid-connected 2000 MW for off-grid applications. The first phase spans from the
remaining period of the11th Plan at the time of launch and first year of the
12th Plan (up to 2012-13), the 2nd phase would be the remaining 4 years of the
12th Plan (2013-17) and the 13th Plan (2017-22) would be the 3rd Phase. There
are provisions for mid-term evaluation of the progress made, review of capacity
and targets of the subsequent phase according to the perceived cost and
technological progress.

The first phase of the mission is focussing on two aspects:
promoting off grid system applications and a modest capacity addition in the
grid. And the second phase would target on aggressive capacity addition and
improving the solar penetration. The targets stated in the JNNSM are:

  • To create an enabling policy framework for the deployment
    of 20,000 MW of solar power by 2022.

  • To ramp up capacity of grid-connected solar power
    generation to 1000 MW within three years – by 2013; and an additional 3000
    MW by 2017 through the mandatory use of the renewable purchase obligation by
    utilities backed with a preferential tariff. This capacity can be more than
    doubled reaching 10,000MW installed power by 2017 or more, based on the
    enhanced and enabled international finance and technology transfer.

  • To create favourable conditions for solar manufacturing
    capability, particularly solar thermal for indigenous production and market

  • To promote programmes for off grid applications, reaching
    1000 MW by 2017 and 2000 MW by 2022

  • To achieve 15 million sq. meters solar thermal collector
    area by 2017 and 20 million by 2022

  • To deploy 20 million solar lighting systems for rural
    areas by 2022.

The first phase (up to march 2013) of the mission targets
majorly on two aspects,

  1. Off-grid and Decentralized applications

  2. Capacity addition to the grid

It provides an enabling framework to support entrepreneurs in
order to develop markets. Supporting viable business models to enhance the
spirit of investors is another focus in this phase. The success of the scheme
depends big time on the flexibility factor that it has incorporated as the
market is currently demand-driven, and that is why it offers a wide range of
incentives where an interested investor can tailor the best suited package as
per his/her requirements.

Off-grid and Decentralized Solar Applications

The off-grid applications include meeting energy requirements
both in the form of electricity and heat. The main objectives of this section of
the scheme are:

  • To promote off-grid applications for meeting the targets
    set in the JNNSM.

  • To create awareness about the usage of solar systems

  • To encourage and promote sustain-able business models

  • To support channel partners and potential beneficiaries

  • To organize consultancy services and seminars, awareness

  • To help replace kerosene and diesel, wherever possible

Various off-grid SPV applications which have a maximum
capacity of 100 kWp per site and decentralized solar thermal applications are
eligible for being covered in this scheme. Even mini-grids for rural
electrification with applications upto 250 kW stand to benefit from it. To help
promote technology upgradation and expansion in production facilities soft loans
would be made available to SME manufacturers through Indian Renewable Energy
Develop-ment Agency (IREDA). Various channel partners are being used for
facilitating faster implementation and minimizing transaction cost and time.
These channels are:

  • RESCOs (renewable energy service providing companies):
    These companies install, own and operate the renewable energy systems.

  • Financial and Microfinance institutions: These
    institutions are mainly into providing loans to the consumer and accessing
    the interest subsidies through refinancing.

  • Financial Integrators: These firms serve the manufactures
    and service providers by integrating different sources of finance available
    for them.

  • System Integrators: These entities are the ones which
    provide design, supply, integration and installation and O&M to the clients.

  • Programme Administrators: Administra-tors include central
    and state ministries and departments, state nodal agencies, utilities, PSUs
    and reputed NGOs. These bodies are responsible for implementing the scheme.

Funding Patterns

Because of the high set up cost, proper funding arrangements
are of crucial importance in order to build an encouraging environment for solar
generation. Funding is available in two modes:
A. Project Mode: To avail the facilities through this mode there needs to be a
project report and monitoring arrangements. The project report would, inter alia,
include client details, technical and financial details and O&M specifications.
The total cost is funded through a mix of debt & equity, where promoter’s equity
contribution has to be at least 20%. MNRE provides a combination of 30% subsidy
and/or 5% interest bearing loans. Further a benchmark project cost is worked out
by the MNRE, on which a capital subsidy of 60% is given. However, in case of
special category states like north eastern states, Himachal Pradesh and
Uttarakhand, 90% subsidy would be given. These subsidies can be accessed only by
the ‘Programme Administrators’.

B. Market Mode: Through market mode different ‘Channel
Partners’ are enabled to access various capital subsidies and soft loans. The
channel partners would tie up with some lending institutions and these lenders
would get into an agreement of refinance with IREDA, then IRDEA gets fund
handling charges by MNRE at the rate of 2%.


Although, off-grid connections are meant for personal or
small scale users, it does take off the burden of generation and distribution to
quite an extent. Apart from this, using solar energy to either supplement or
complement one’s energy requirements helps in fighting climate change and
reducing country’s carbon footprint. So it makes sense to promote its usage and
so a slew of incentives have been announced to encourage the potential investors
for participation. These benefits are provided in forms of RE vouchers, capital
subsidies, interest subsidies and green energy bonds.

Release of Funds

Release of funds under JNNSM is conducted in two ways. For
the projects which are to be developed by administrators (government ministries,
PSUs and NGOs), fund release could be front-ended, it would be done in two
instalments, 70% on sanction and 30% on completion. Release of funds in case of
private channel partners would be back-ended i.e. it will be in the form of
reimbursement of the cost incurred and would be given after a proper
verification of completion and efficiency of the project.

Adding Generation Capacity

The second objective of the first phase of JNNSM is to add
capacity to the grid by installing both ‘Large PV and thermal plants’ as well as
‘Small and Rooftop PV systems’. In order to facilitate generation, a concept of
‘Bundled Power’ has been introduced, which means that the costly power generated
through solar plants would be bundled with the cheaper power available under the
unallocated quota of the MoP generated at NTPC coal based plants. And this
bundled power would then be sold to the distributors at a price determined by
CERC. NVVN would act as the nodal agency for procuring the power generated from
solar plants through PPAs.

The objectives of these bundled power related guidelines
are to:

  • Facilitate quick start up of the JNNSM

  • Ensure serious participation from investor for its

  • Expedite implementation of the projects

  • Boost the confidence of the potential developers

  • Promote the solar manufacturing industry

The projects under the grid connected system are broadly
divided in to two categories: rooftop & small solar plants and large solar power
plants. The projects under this scheme are those which are meant for very small
scale generation and can further be categorized in two types.

  • Projects connected at HT level: Those projects whose
    generation capacity is between 100 kW and 2 MW and is connected to the grid
    at HT level (below 30 kV) will fall under this category. The envisaged
    capacity addition in the first phase through these plants is 90 MW.

  • Projects connected at LT level: The projects which have a
    capacity less than 100 kW and are connected to the grid at LT level will
    come under this category. These plants are expected to add 10 MW in the
    first phase.

Roles and Responsibilities of various entities for
projects under this category:

  • State governments: State govern-ments are required to
    designate a competent authority which would be empowered to issue
    pre-registration certificates. These certificates are required for being
    registered with the programme administrator(s) and reporting on progress of
    implementation of projects.

  • State Distribution Utilities: The state utilities would
    have to buy power from the developers under PPA at a tariff decided by the
    concerned SERCs, and would have to make the necessary arrangements for
    evacuation of power. Utilities are also responsible for providing
    ‘Certificate of Power Purchased’ to the programme administrator on a monthly

  • Programme Administrators: For these projects, IREDA would
    act as a ‘Programme Administrator’. IREDA will be responsible for
    registration of projects seeking GBI (Generation Based Incentives),
    maintenance of progress reports of projects, issuing certificates conforming
    GBI and disbursement of GBI to the distributors.

Large Solar Power Plants

This category includes power plants which have large
generation capacity ranging from 5 MW to 100 MW and would connect to the
transmission substation at 33 kV and above. Projects under this category can be
subcategorized in two types:

(a) Solar PV Projects: PV projects would have a capacity of 5
MW with a variation of ±5%. To promote local manufacturing of solar products,
it’s been made mandatory for these projects to procure components locally from
2011-12 onwards.

(b) Solar Thermal Projects: The minimum capacity of the
thermal projects would be 5 MW while the maximum would be 100 MW. And these
projects are expect to make 30% of the procurement locally, excluding land.
Penalties for Delays: In order to ensure quick implementation in order to
achieve the targets set for the first phase, several disincentives for delays
have been proposed in the JNNSM. Solar PV plants should be commissioned within
12 months of signing the PPA, while in case of solar thermal plants it is 28
months. Any delay in the commissioning and NVVN would start to encash the
performance bank guarantee deposited by the developers.

Following is the manner in which these guarantees would be en

  • Delay of upto 1 month: NVVN would encash 20%

  • Delay of more than 1 month and upto 2 months: NVVN would
    en cash 40%

  • Delay of more than 2 months and upto 3 months: NVVN would
    en cash all of the remaining.

Role of State Governments: State government would play a very
crucial role in the development of large solar plants. They would the
responsible for appointing a state level agency to facilitate speedier
implemen-tation of the projects. State government will provide support to the
developers in providing better access to the site area, land acquisition, water
allocation and connectivity to the transmission substation.

The Road Beyond Phase 1

JNNSM has appreciated the need and importance of keeping the
targets and policies flexible in a demand-driven market so as to be able to
incorporate the best possible option available at any time. It clearly
stipulates that the targets and guidelines of any subsequent phase would be
based upon the learnings from the previous ones, evolving changes and other
anticipated factors.

Solar Manufacturing in India

India is well endowed to take a global leadership position in
solar, it has already built a PV manufacturing capacity of 700 MW and is growing
rapidly. To further this pace of growth certain measures are being recommended.
For example, zero import duty on raw materials, low interest rate loans,
incentives under SIPs, single window clearance facility and creating a few solar
manufacturing tech parks which will consist of manufacturing unit, research
institutes, offices and housing. These would help the nation in gaining an edge
over all the competitors and enable us to make the most the opportunities

Research and Development

Major R&D programmes are about to be launched in India which
would focus on bringing the cost down, improving the efficiency of the existing
system, testing hybrid generation, developing cost effective storage and
improving the space intensity. These programmes in R&D will deal with five

  1. Basic research focussing on long term aspect of

  2. Applied research based on improving the existing system

  3. Technology validation & demonstration

  4. Development of R&D infrastructure

  5. Support for incubation and start ups

Human Resource Development

With the rapid expansion expected in the solar energy sector,
there would be a huge demand for skilled manpower and it would include
engineering, management and R&D. The total estimated workforce required by the
end of 2022 is around 1,00,000. To develop such an asset would require some
rigorous steps in collaborating with top notch colleges and establishing new
ones dedicated to this purpose.

International Collaborations

In order to keep up with the pace the innovations going on
around the world and benefitting from them, it’s imperative that we collaborate
with others and this has been adequately recognized in the policies of MNRE. The
collaborations are currently being worked out through joint research and
technology transfer and industry partnership. MNRE has made several bilateral
and multilateral arrangements with various countries, a research programme with
the European Union is being felicitated, bilateral programmes under the Asia
Pacific Partnership Programme with Japan and Australia are being implemented.
With US also there is a project under implementation which would focus the
radiation data collection.

Current Status

Back home the ambitious JNNSM is about to take off, the
biddings for the first phase is being carried out, under which projects worth a
total capacity of 650 MW would be awarded to 40 of the 350 bidders. CERC has set
a price of Rs.17.91 for per unit of PV power and the ones ready to take the
biggest discounts will be awarded. In the bidding process, there are three sets
of bidders who are likely to emerge winners. First is the companies who are in
manufacturing would be able to go deeper on discounts, big companies are the
second group who can afford these rates easily and third group is of the newly
formed companies who would be aggressive to get started with. But just getting
the start is not good enough as there would be cases where experienced companies
who have implemented similar projects would lose out in the process of bidding.
Few days ago, even Tata, the biggest private generation company in India,
announced that it would not be bidding for the projects because it thinks that
making profit at such high cost would be very difficult. Such cases would hamper
the quality of the very foundation of solar mission. Projects execution done by
the companies with financial strength and experience brings long term benefits
and quality and these two things are of the essence for something as ambitious


Using the power of sun to meet our energy requirements has
numerous advantages and is harmless to the environment as it allows the user to
attain an ecologically sustainable growth and India duly recognizes the
potential of this solar energy. It is reflected by the targets set in JNNSM and
the enthusiasm with which it has been launched. India is one of the global
leaders in using solar and is making sincere efforts to improve fast and gain
substantial generation capacity, but a lot would depend on the success of JNNSM
and how the industry takes these opportunities. Investments in conducting R&D
and developing a pool of human resource are critical for the way forward. But
all said and done, it’s time we looked up to SUN.

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