India, the second most populous nation on the planet, is following China’s solar lead and making a major shift toward promoting green energy, in both the corporate and environmental sectors. Taking the lead in these measures is Indian Oil Company (IOC), India’s largest oil provider, who has recently set aside $430 million to invest in renewable energy sources, including solar power.
While IOC already has wind plants for captive use, it has not yet begun using renewable sources for commercial electricity generation. Among IOC’s plans for solar power are registrations for rooftop solar panel installations for private homes and businesses, whereby the company could take advantage of highly favorable feed-in tariffs, which are about five to seven times the tariffs from coal-generated electricity, and generate revenue by selling solar-based electricity to main power grids.
Other oil companies are following IOC’s example, and have begun planning the construction of solar power plants around the country. The National Solar Mission outlined by the government encourages this diversification of energy sources, since it aims at 20,000 megawatts (MW) of solar power being generated in India by 2022.
At the present time, India only generates 12 MW of solar power, but construction is planned that will bring this amount up to 1,000 MW. To facilitate the success of the National Solar Mission, the government has begun offering millions of dollars in subsidies to solar power plant investors, and is encouraging oil companies to make the jump to solar power with financial incentives as well. Additionally, a solar energy security fund will ensure that the government pays companies providing solar power if local utilities companies fail to honor the feed-in tariffs.
Profitable feed-in tariffs for electricity from solar sources are only one of the perks offered by the Indian government to encourage the spread of renewable energy. The government is also offering tax breaks and subsidized equipment purchase to companies willing to construct solar power plants. These measures are highly attractive to India’s oil companies, since many of them have sustained large profit losses in recent years, due in part to the government subsidies on petroleum products.