NEW DELHI (Reuters) - India will struggle to hit its “hugely ambitious” renewable energy target if it fails to make more land available for plants and ensure utilities have the means to buy in clean energy, the head of U.S.-based First Solar said on Sunday.
Prime Minister Narendra Modi has made renewable energy a priority for his government, as he looks to leverage the falling cost of solar power - expected to reach parity with conventional energy by 2017 - and address India’s chronic power shortages.
First Solar Chief Executive Jim Hughes said he welcomed the government’s commitment to develop 100,000 megawatts (MW) of solar power by 2022 - a 33-fold rise from today’s level - but that in some Indian states there were question marks over the financial viability of solar schemes.
“It makes it difficult to develop projects in these circumstances,” Hughes told Reuters in an interview in New Delhi.
First Solar, based in Tempe, Arizona, makes solar panels and also builds solar power plants, many of which it sells to power producers.
Opening India’s first major renewable energy conference on Sunday, Modi said clean energy was an “article of faith” for him.
Analysts have said Modi’s targets will be difficult to reach given the poor financial health of mostly state-run electricity distribution companies that would buy solar energy, and the slow pace at which land for plants is made available.
First Solar said on Sunday it planned to develop 5,000 MW of solar in India by 2019, while U.S. rival SunEdison announced plans to build 15,200 MW of solar and wind power by 2022.
Hughes said First Solar needed to secure land, agree financing and reach power purchase agreements with buyers before building the capacity.
Its commitments follow recent pledges to launch new solar plants by domestic companies like Adani Enterprises and Essel Group.
“India has a critical need to add capacity to its grid as it continues to experience strong economic growth and growing demand for energy,” said Pashupathy Gopalan, president of SunEdison Asia-Pacific.
India wants to raise its energy mix from renewables to 15 percent in 10 to 12 years from 6 percent now, Power Minister Piyush Goyal told the conference in Delhi on Sunday.
Total installed photovoltaic solar capacity globally stood at 135,000 MW at the end of 2013, according to First Solar.
India’s largest lender, the State Bank of India, said it would bankroll 15,000 MW of solar power by 2020. The SBI did not disclose the size of the financing package but 1,000 MW of solar typically costs about $1 billion.
One MW can power roughly 1,000 U.S. homes, although this varies widely, depending on the amount of heating or cooling needed.
Reporting by Krishna N. Das; addditional reporting and writing by Tommy Wilkes; Editing by Robert Birsel and Susan Thomas