All that glitters is not solar
From the Softbanks of the world to local farmland owners, one investment that is attracting the money of the Bhartis and the Adanis of the country is solar power.
From a miniscule 2 Mw in 2010, India’s total solar powercapacity now stands at 4,000 Mw. Piyush Goyal, minister of state for coal, power and renewable energy, has been saying ad nauseam that “PM Narendra Modi’s dream is to scale up solar to 1 lakh Mw”. Last week, finally, that proposal got the Cabinet’s nod.
The plan, in layman terms, is this: solar panels on your rooftops, on barren land, over canals, rivers and deserts, on mountaintops, solar to run your agri-pumps, telecom towers, factories, remote army units, rural households, and what not.
Fancy, isn’t it?
Unfortunately, solar energy across the world has largely been synonymous with such fancy ideas, with the exception of China. In most cases, solar power was a desperate measure to evade an energy crisis and to look green. For Germany it was a way to neutralise dependence on nuclear energy, while for the US, it was shock therapy administered post the great blackout of the north and eastern states in 2003 as well as the fact that oil was becoming a tool of war rather than just fuel.
In India, on the other hand, it is rapidly becoming the new real estate business. Beyond the millions invested by big names, there are small time players who, with their barren lands and idle capital, are getting tax benefits of as much as 80% of accelerated depreciation (AD) on their balance sheets. It doesn’t matter if you are a halwai or a cement manufacturer – they are both listed as the proud owner of a solar power plant! Established, serious solar power project developers have been waging a war against AD but to no avail.
Financiers will tell you that there is a beeline of landowners who want to set up solar power plants. States are more than happy to give permission so they can tout a long list of investors in solar projects every year.