'Sunny Makes Money': India installs a record volume of solar power in 2022

MUMBAI, India – It's smog season in India, when industrial and vehicular emissions mix with crop-burning smoke, and winter temperatures pull a huge sooty cloud down over much of the country.

But through the haze, there are twinkling signs of hope popping up on rooftops across India's sprawling megacities: solar panels.

Despite having lots of tropical sunshine, India gets about 70% of its electricity from burning coal – which exacerbates air pollution that's already some of the worst in the world. But this year, the country has also installed a record volume of solar energy.

It's a sign of what climate scientists say is a much-needed push for renewable energy in what's soon to become the world's most populous country. (The United Nations predicts India will overtake China next year.)

As India develops, and its 1.4 billion people get richer, its energy needs are expanding. Unlike many Western countries, which have pledged to cap overall emissions, India measures its emissions in proportion to its gross domestic product. This year, the government pledged to reduce by 45% the so-called "emissions intensity of its GDP" by 2030.

And at the U.N.'s recently-concluded COP27 climate talks, India repeated a pledge to get half of its energy needs from non-fossil fuels by that same year.

Scientists say that's ambitious, and that India will need to boost its solar capacity even more if it has any hope of keeping that promise.

It's not just solar farms in the desert

Most of India's renewable energy comes from massive solar farms in the deserts of Rajasthan or Gujarat. Many are public-private partnerships run by utility companies, sending electricity into the grid. The Indian government is also opening up more coastal areas to offshore wind energy.

On a much smaller scale, Indian farmers often use a solar panel or two to run irrigation pumps in rural areas, where the electricity grid is shaky.

But rooftop solar never really caught on – at scale – in urban India.

For one, cities are where India's power grid is most reliable. The need for any backup source – usually, diesel generators – has diminished in recent years. Second, the Indian government subsidizes electricity, so it's cheaper than in most parts of the United States, for example. And third, most solar panels in India are imported, expensive – and not really worth it for any individual household.

That's changing now.

"I think it's one of the fastest-growing industries in the country," says climate change expert Suruchi Bhadwal. She spoke to NPR by phone from the COP27 talks in Egypt. "Even the U.S. has not boosted its installed capacity so much, so fast."

China and the U.S. still invest more in renewables on an annual basis. But India's investments – particularly in solar – are growing faster, due to what Bhadwal calls an "aggressive" campaign by the government.

What the Indian government is doing

Every five years, India puts together a National Electricity Plan. The most recent one, issued in September, outlines a 24% increase in solar power production targets for 2027. That amounts to a "quantum jump" for India's renewable energy sector, according to one international climate think tank.

To meet its targets, the government is onshoring the manufacture of photovoltaic panels, subsidizing Indian companies' investments in them, and waiving transmission charges for renewable energy, says energy economist Vibhuti Garg, at India's Institute for Energy Economics and Financial Analysis.

"India is making huge progress in terms of deploying renewable energy, investment as well as capacity. In the financial year 2021-22, we saw a record of $14.5 billion investment in renewable energy alone," Garg tells NPR. "In addition, there were investments to developing the transmission and distribution infrastructure, modernization of the grid. Some amount of money even flowed to battery storage."

Residential rooftop solar is still lagging behind, Garg says. To try to boost it, the government has set up a new rooftop solar web portal, where anyone who wants to set up solar panels can register for government subsidies. (Similar such subsidies are one way China has boosted the competitiveness of its own solar industry, though it recently began scaling them back.)

All this prompted the accounting firm Ernst & Young this year to rank India – along with the U.S. and China – as one of the world's most attractive solar markets.

A new generation of solar evangelists in India

A decade ago, Jay Vyas was an accountant in his 50s, working on a variety of projects, when a proposal for a rooftop solar installation came across his desk.

"I just opened that file, and saw the client wanted to invest in solar," Vyas recalls. "Now, I'm passionate about looking into new things that might become commercially viable. So I thought, 'Why not?' and I started looking into it."

In 2017, Vyas co-founded Koku Solar, a company that's since installed hundreds of small-scale solar projects on residential rooftops in the western Indian state of Maharashtra, where Mumbai is the capital.

Vyas is one of thousands of new solar entrepreneurs who've cropped up across India. He fancies himself a sort of solar evangelist. (Before meeting NPR, he sent this reporter a pamphlet he'd authored entitled "Sunny Makes Money.")

"When I wake up in the morning, I commit myself to speaking about solar to at least three people every day," Vyas exclaims. "You are one of them today!"

He and his business partner, Chinmay Divekar, gave NPR a tour of one of their latest solar projects, on the roof of a high-rise residential society – the Indian equivalent of a condo association – northeast of Mumbai.

"Most of the buildings you see from here have solar panels on them – and that wasn't the case just a few years back," Divekar explains.

The economics have changed.

Onshoring supply chains for photovoltaic panels in India

Vyas and Divekar used to import solar panels from Germany or Singapore. They're expensive, but they last 25 years, and Vyas says he wasn't sure that would be the case with cheaper Chinese models, he explains.

Recently, their company began using domesticallymanufactured panels. They're more affordable than imported models. That's made the difference for some residential customers, Vyas says.

At one of the high-rise buildings where he's installed Indian-made panels, the condo association manager, Swati Nevgi, says her communal bill for electricity in common areas – operating a bank of elevators, lights in the hallways, air conditioning in the lobby – has dropped by about a third. That means the building re-cooped its investment in roughly three years.

Vyas says it's typically around three to five years for most of his customers. But that's decreasing, he says. Rising global electricity prices make solar panels even more attractive now.

But there's a catch when it comes to Indian-made panels: They're still not entirely made in India.

"The silicon inside, that's still imported from China – and is subject to price fluctuation," Divekar explains.

So even though India is manufacturing more panels domestically, some components still need to be imported. That's set to change soon, with record investments from two of India's biggest conglomerates, the Adani Group and Reliance Industries, to onshore the entire solar panel supply chain.

If that happens, prices may come down even more. And in the next 10 years, economists say solar may become India's cheapest energy source.