Solar Power in India! Who Will Benefit?
India’s National Solar Mission was launched in 2010 with the goal of adding 20,000 Mega-Watts of grid connected solar power by 2022. The National Solar Mission supports small and decentralized solar plants such as Rooftop solar power plants, but it also invests heavily in massive solar power plants like the one recently switched on in Gujarat. The plant in Gujarat was built under the administration of then Chief-Minister, Narendra Modi. Modi is soon to take the helm as India’s prime minister, and he has affirmed a commitment to solar energy. Modi’s history of support for development that favors corporate investment suggests that his vision of a solar India will be focused on large solar plants, which are financed through public-private partnerships.
In February of this year, the United States trade representative Michael Froman filed a formal complaint with the World Trade Organization (WTO) attacking India’s solar power policy. Froman complained that India’s Jawaharlal Nehru National Solar Mission violates trade regulations by requiring that 10% of all new solar projects to use photovoltaic panels produced in India. Froman insisted that this requirement unlawfully favors Indian companies and raises the global price of solar panels.
This action is yet another example of the US trying to leverage power in the WTO to make its own industries more profitable at the expense of environmental sustainability and Third World Development.
India has denied that their local sourcing requirements violated any trade agreements. In fact, this is the second time that the US trade representative has criticized India’s National Solar Mission, and as recently as April 29th India refused to enter into a formal process to settle the dispute with the US.
Although India’s central government has proclaimed its ambition to supply electricity to all of the people who currently do not have access to electricity, many are skeptical that rural villages will ever (or at least quickly) be connected to the grid. Instead, innovative companies have developed small, off-grid systems to supply power to rural areas. Mera Gao Power specializes in building rooftop power plants that can be connected to houses surrounding the plant. OMC Power has developed a solar power plant that can be quickly constructed and is designed to power both rural homes and rural mobile phone infrastructure.
Through a combination of large and small solar projects, India is rapidly expanding its solar power generation, but it requires access to affordable solar panels. The local sourcing requirements of the National Solar Mission are intended to be investments in India’s own solar panel production capacity, and the US trade representative views this industry as a threat to US manufacturers.
However, only one US company is a major supplier of solar panels to India, but this company, Arizona’s First Solar, fulfills 22% of India’s photovoltaic panel needs. It seems that trade representative Froman’s objections are as much about India as a future market for US solar panel manufacturers as they are about current market share.
Most importantly, his objections are a clear signal that the US is once again putting its own profitability concerns over India’s goals for a more sustainable development through solar power expansion. Thus far India has not capitulated to US demands, but we doubt that this story is yet over.