A few years ago, Solar was considered experimental and was a niche industry in the huge sector of energy generation. It is important to note that in 1977, solar panels cost $77 per watt p. However, currently solar modules cost between $0.33-$0.36 cents/per Watt p, which identifies more than 99% fall in prices. Also In 2015, power generation from renewable sources (1,985 GW) surpassed coal based energy generation (1,951 GW). And today, Solar PV panels have garnered a huge demand, resulting in global capacity additions nearly reaching 100 GW in 2017 alone. Countries, developing and developed alike are investing more in renewable energy ($286 billion in 2016) than conventional fossil fuel ($130 billion in 2016). New technologies that support renewable energy adoption like- Battery storage systems are also getting cheaper, paving a path for renewable energy (mainly solar) to become mainstream energy source.
Although the world has accepted solar and are working towards solarisation in an collaborative effort, it is important to note that solar only generates 2% of global electricity. Which is not very impressive if solar is to replace fossil fuels quickly. Mass adoption of green energy is the only way to save our future and climate, both of which are rapidly degrading, due to continuous use of depleting reserves of fossil fuels.
And the most important component that can assist in mass adoption is innovation.
Innovation Is Necessary
Dominant countries like China, US, Japan are focusing on innovation by investing huge amounts of money in R&D and creating competition between solar manufacturers to develop better products (Top Runner program).
Developed and developing countries alike are focusing on reducing risks, improving infrastructure, mandating best in class product use, and enforcement of quality guidelines through policies to promote innovation. Through innovation, quickly developing solar industries in countries like-India will match the global standard in quality, performance, and eventually surpass it. Innovation in solar will reduce solar tariff and panel price aiding in mass adoption. Through innovation, developing countries (e.g- India) will easily satisfy its domestic energy demand and energy security. Growth in Innovation will urge industrial improvement and lead to production of better quality products, thus claiming a position in the export market. Focus on innovation would create new jobs and businesses, initiating socio-economic growth.
The major part of the solar innovation has to be technological. Solar technology is much more simplified than that of identifying, extracting, purifying, and using fossil fuel based energy. However, it does require a lot of space to generate energy. And considering the rising population (7.5 bn currently), it is easy to understand that if solar is to become a mainstream energy source, it has to reduce its space requirements or lose its mantle of ‘best replacement for fossil fuels’. And to make solar panels more efficient in generating more and more energy while reducing their size, technological innovation is needed.
That is just one angle how technological innovation should support green energy shift. There are other requirements like- power supply and evacuation infrastructure improvement, which require innovation and investment to support the solar shift. Government should focus towards building platforms that can encourage cross-country solar technological exchange (ISA is a decisive move by India in this regard), agreement of technological collaboration for rapid solar growth. Investing in technological development will build a better infrastructure for renewable energy development.
Besides, technology is not the only area where we need innovation to support solar.
$125 billion funding is needed for 175 GW renewable energy installation in India, out of which 100 GW supposed to be coming from solar. Foreign private equity investors have already shown interest in investing into Indian solar sector, while development banks like World Bank are offering financial support. And Foreign direct investment in India has also increased up to 17%, in recent years.
However, currently Indian solar industry is in a state of confusion in the domestic industry regarding Anti-dumping duties, fall of solar tariff, PPA re-negotiation, and delays in tender auctioning. All these issues are scaring off foreign investors. Estimates suggest that lack of proper funding might reduce solar capacity addition by 40 per cent in the current financial year, which would definitely deal a severe blow to the growing industry.
Therefore, innovation in financial strategy setup is required. There is an immense opportunity for the private sector to enhance its investments in the R&D sector in India. Flexible and innovative financial strategies are needed to enhance investor interest and allow the foreign financial help commitments to turn into reality, while leading domestic solar companies to invest. Strategies like- providing tax deductions on R&D spend of solar companies will encourage more investment into the solar technology development.
Investment is innovation for both technology and financial mechanism development is essential to build solar into the reliable mainstream energy source we want it to be. The quicker the green energy shift has taken effect, the better it would be for the world. And the only way to make it happen is through innovation.
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