The landscape of solar energy in emerging economies is undergoing a seismic shift, driven by favorable government policies and a pressing global energy crisis. As Gyanesh Chaudhary, chairman and managing director of Vikram Solar, aptly points out, the global capacity for renewable energy is poised to nearly double in the next five years, with solar energy expected to outpace coal as the largest source of electricity generation. This transition isn’t just a passing trend; it’s a fundamental transformation of how we think about energy.
Emerging markets are stepping up to the plate, offering unique advantages that include lower labor costs and supportive political climates. India, in particular, has emerged as a hotbed for solar manufacturing. The country’s installed solar capacity ballooned from a mere 0.9 GW in March 2012 to an impressive 82 GW by March 2023. This meteoric rise showcases the effectiveness of policies like the Basic Customs Duty (BCD), Domestic Content Requirement (DCR), and the Production-Linked Incentive (PLI) scheme, which collectively stimulate domestic manufacturing and reduce reliance on imports.
Yet, while the momentum is palpable, the road ahead is riddled with challenges. Aging grid infrastructure and the intermittent nature of solar energy pose significant hurdles. To truly unlock the potential of solar, these emerging economies need to invest in modernizing their grids and developing robust energy storage solutions. Without these critical investments, the dream of seamless solar integration may remain just that—a dream.
The technological advancements in solar energy are nothing short of remarkable. Bifacial solar panels, which capture sunlight on both sides, and high-efficiency TOPCon and PERC cells are revolutionizing energy generation. These innovations not only enhance efficiency but also make solar energy more accessible in cost-sensitive markets. As solar becomes more affordable, the appetite for it grows, particularly in regions where energy access has historically been limited.
India’s ambitious rooftop solar initiative, the PM Surya Ghar Muft Bijli Yojana, aims to equip 10 million homes with solar systems, providing up to 300 units of free electricity monthly. This program is a shining example of how targeted policies can drive adoption and create socio-economic benefits. It’s not just about generating energy; it’s about empowering communities and fostering energy independence.
However, to sustain this growth trajectory, a collaborative effort between governments and the private sector is essential. The Indian government’s proposal for INR 35 billion in viability gap funding for battery storage is a step in the right direction. Yet, this is just the tip of the iceberg. International cooperation and financing can play a pivotal role in developing the necessary infrastructure in these emerging markets.
As we look to the future, the narrative is clear: with continued policy support, technological advancements, and strategic investments in infrastructure, emerging markets are not just participants in the global energy transition; they are poised to lead it. The question now is whether they can rise to the occasion and overcome the challenges that lie ahead. The energy landscape is changing, and those who adapt quickly will be the ones to shape the future.
