Attractive incentives to individuals and industries is probably the only way the renewable energy sector can become the next booming industry in India, after software services. For the Government too increased focus on clean tech R&D and green economy will prove to be the best way forward.
The Indian government has already initiated a number of schemes to encourage sustainability such as the Indian Renewable Energy Development Agency (IREDA) schemes for subsidising capital for installation of solar water heaters, encouragement of energy audits and management schemes, mandatory use of fly ash-based construction material, groundwater and rain water harvesting and most importantly increased monitoring of air and water pollution.
Incentives to individuals
Many advanced nations have benefited much the same way. Many have come forward and offered incentives to individuals too. During the height of the recessionary period, Government incentives to buy green vehicles in Europe and Japan helped boost business of the automobile sector to some extent. Japan’s auto market recovery is said to be partly stimulated by tax cuts or rebates for consumers to scrap their old cars and buy ecological vehicles. The German government’s stimulus involves paying consumers 2,500 euros for scrapping old cars to buy new, environmentally cleaner vehicles. China also plans to subsidize purchases of energy efficient cars and home appliances to replace older models.
The Indian Government, on the other hand only offers some small incentives in the form of duty concessions on electric vehicles. The Environment-Friendly Vehicles (EFV) segment in India remains stagnant because of lack of incentives for manufacturing. The government plans to offer incentives only after “substantial” numbers of such vehicles come up in the market.
Solar cells and panels
Almost three years ago the Indian government had announced incentives for manufacturing solar cells and panels with the objective of meeting 10 per cent of the country’s power needs through renewable energy by 2012. Following the announcement a number of corporate houses showed keen interest in joining the nascent solar industry in India.
Three years hence, the need is for mass adoption of solar power in India. This can only be achieved through special state incentives such as financing schemes for individuals investing to absorb the high upfront costs.
Chinese emphasis is in wind-power, clean-coal and use of LED. But as India has about 200 clear sunny days in a year, it should focus on solar energy as an important element of its renewable energy stimulus package. India’s sun resource is grossly underutilized. There is serious lack of solar technology innovations mainly due to a total lack of policy incentives.
A long way to go
Still there is a long way to go. Both in terms of offering incentives and creating awareness. Incentives and awareness for recycling of materials is a major area which needs attention. And ideally renewable energy should be categorized and declared as a priority sector.
Watch video on India’s adoption of solar energy
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