Examine the financial and technical viability of solar energy projects in India. Also discuss the Government Schemes launched to promote solar energy in the country

India is a fast-growing country with a very high demand for energy. With rising population, industries, and transport needs, the requirement for electricity is increasing every year. Traditionally, India depended on coal, oil, and gas to meet its energy needs. But these fossil fuels are limited, polluting, and expensive to import.

Solar energy has emerged as one of the most important alternatives. India is a tropical country, and it gets abundant sunlight for most of the year. This natural advantage makes solar energy a good option to reduce dependence on fossil fuels. At the same time, solar energy helps in fighting climate change, creates jobs, and supports sustainable development. we will examine the financial and technical viability of solar energy projects in India. We will also discuss the government schemes and policies launched to promote solar energy in the country.

Financial Viability of Solar Energy Projects in India

Financial viability means whether solar projects can generate power at a reasonable cost, provide returns on investment, and be affordable for consumers.

1. Falling Costs of Solar Power

In the last decade, the cost of solar panels and related equipment has fallen sharply worldwide.
In India, solar tariffs have come down from more than ₹10 per unit in 2010 to around ₹2–₹3 per unit today.
This makes solar energy one of the cheapest sources of electricity, even cheaper than coal in many cases.

2. Low Operating Costs

Once a solar plant is installed, the running cost is very low.
Unlike coal plants, there is no need to buy fuel daily.
Only maintenance of panels, inverters, and cleaning is required.

3. Job Creation and Economic Benefits

Solar energy projects create jobs in manufacturing, installation, operation, and maintenance.
India has a target of installing 500 GW of renewable energy by 2030, and solar will play a big part in this. This target itself creates huge economic opportunities.

4. Attracting Investments

India has become a major destination for renewable energy investments.
International companies and investors are showing interest because of India’s large solar potential and supportive government policies.

5. Challenges in Finance

High upfront cost: Even though running cost is low, setting up a solar project requires high initial investment.
Land costs: Large solar farms need huge areas of land, which is expensive in densely populated regions.
Financing difficulties: Small businesses and households sometimes struggle to get loans for rooftop solar projects.

Conclusion on financial viability: Solar energy in India is financially viable in the long run because costs are low and falling further. The main challenge is high upfront investment, but with government support and cheaper loans, this can be overcome.

Technical Viability of Solar Energy Projects in India

Technical viability means whether solar energy projects can run efficiently and reliably with the existing technology and infrastructure.

1. India’s Solar Potential

India receives about 300 sunny days in most parts of the country.
Average solar radiation is around 4–7 kWh per square meter per day, which is enough to generate large amounts of electricity.
States like Rajasthan, Gujarat, Madhya Pradesh, and Maharashtra are especially rich in solar resources.

2. Availability of Technology

India has access to modern solar technologies such as photovoltaic (PV) cells and concentrated solar power (CSP).
Domestic companies manufacture solar panels, inverters, and batteries, although imports (especially from China) are still high.

3. Grid Integration

Solar power is intermittent, meaning it is available only when the sun shines.
To ensure 24/7 electricity, solar needs to be combined with storage systems like batteries or supported by other power sources.
India is working to improve its grid to handle variable renewable energy.

4. Storage Solutions

Battery storage technology is improving, but costs are still high.
Research is being done on low-cost storage solutions, such as pumped hydro storage and advanced lithium batteries.

5. Local and Decentralized Solutions

Rooftop solar systems on houses, schools, hospitals, and offices can provide clean energy directly to users.
Solar pumps for farmers are already helping in irrigation.
Small decentralized solar grids are proving useful in villages where big power grids cannot reach.

6. Technical Challenges

Dependence on imports: India still imports a large share of solar cells and modules, which makes projects vulnerable to global price changes.
Land acquisition: Setting up large solar parks requires thousands of acres, which sometimes face opposition.
Efficiency: Solar panels in hot and dusty climates often lose efficiency if not cleaned regularly.

Conclusion on technical viability: Solar energy projects are technically viable in India because the country has abundant sunlight, modern technology, and growing expertise. The main challenge is storage and grid stability, but with continuous innovation, these issues can be solved.

Government Schemes to Promote Solar Energy in India

The Government of India has launched many policies and schemes to encourage solar energy. These include subsidies, tax benefits, and national missions.

1. National Solar Mission (NSM)

Launched in 2010 under the National Action Plan on Climate Change.
Aim: To establish India as a global leader in solar energy.
Target: Initially 20 GW by 2022, later revised to 100 GW by 2022.
Extended further as part of the 500 GW renewable target by 2030.

2. PM-KUSUM Scheme (Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan)

Focuses on farmers.
Provides solar pumps for irrigation, reducing dependence on diesel and electricity.
Farmers can also sell extra power to the grid, providing them extra income.

3. Rooftop Solar Programme

Encourages households, offices, and institutions to install solar panels on rooftops.
Provides subsidies of up to 40% for residential users.
Helps reduce electricity bills and dependence on grid power.

4. Solar Parks and Ultra Mega Solar Power Projects

The government supports the creation of large solar parks with all infrastructure provided.
Investors can set up plants without worrying about land or transmission issues.
States like Rajasthan, Gujarat, and Andhra Pradesh have major solar parks.

5. Solar Cities Programme

Aims to make at least 60 cities in India “solar cities.”
Encourages use of solar street lights, rooftop panels, and other solar solutions in urban areas.

6. Production-Linked Incentive (PLI) Scheme for Solar Manufacturing

Encourages domestic production of solar cells, modules, and related equipment.
Helps reduce dependence on imports and builds self-reliance.

7. Renewable Energy Development Agencies (State Level)

Each state has its own renewable energy agency to promote solar projects.
They provide additional incentives like exemptions in electricity duty and land support.

Overall Impact

India is now one of the largest solar energy markets in the world.
Installed solar capacity has grown rapidly from less than 10 MW in 2010 to more than 80 GW in 2024.
Government schemes have reduced costs, improved access, and encouraged both large and small projects.
Solar energy is helping India meet its climate commitments under the Paris Agreement.

Solar energy projects in India are both financially and technically viable. Falling costs, abundant sunlight, and supportive policies make solar energy a strong option for the future. There are challenges, such as high initial costs, storage problems, and land use issues. However, with new technology, better financing options, and government support, these challenges can be managed.

The Government of India has played a key role through schemes like the National Solar Mission, PM-KUSUM, Rooftop Solar Programme, and PLI scheme for manufacturing. These initiatives not only promote clean energy but also create jobs, support farmers, reduce imports, and make electricity affordable.

In the coming years, solar energy will be central to India’s goal of becoming a clean, green, and energy-secure nation. With continued investment, research, and citizen participation, India can truly become a world leader in solar power.