Harnessing Solar energy, Options for India

Degression of tariffs: From 2003 onwards, the tariffs for new installations were lowered for
each subsequent year. This was done to provide an incentive for manufacturers to
systematically reduce production costs and to offer more efficient products every year.
Differentiated nature of tariffs: The tariffs for the different technologies defined in the Act
were determined based on the yield and generation costs of each particular plant.
Additionally, differential tariffs were set based on plant size and location.
On 9 July 2010, the German Bundestag and Bundesrat agreed on a two-phase plan that would amend
the Renewable Energy Sources Act and ultimately decrease feed-in tariffs by 11 to 16% by the end of
2010. The plan is separated into three installation categories. 13
5.2. Spain
The 2004 Royal Decree 436/2004 set up the general framework for supporting renewable energy
and provided incentives for new installed capacity of renewable energy sources. Generators could
choose one of the following payment options: 14
Generators who sold their production to a distributor received a fixed tariff based on the
generation technology.
Generators who sold their electricity on the free market received the negotiated market
price of electricity, an incentive for participating and a premium.
Spain added close to 2.6 GW of grid-connected solar PV in 2008, and in a single year overtook Japan
to become the country with the second largest installed capacity of grid-connected solar PV in
2008. 15 The feed-in tariff offered was €0.44 per kWh, which led to explosive growth, but ultimately
was too generous. The main problem with the tariff was that it had no long-term provisions to react
to the market. As a result, Spain reduced tariffs for solar PV because its 2010 target was already
achieved, set 10% annual tariff reductions, and also instituted a 500 MW solar PV capacity cap for
both 2009 and 2010. 16
5.3. The USA
The USA was one of the early movers in the use of solar energy globally. However, its solar industry
was overshadowed first by Japan and more recently by Europe (particularly Germany) due to
stronger incentives offered by those countries. In the USA, the incentive framework for solar energy
is fairly complex, with incentives being available at the federal as well as the state level. However,
the growth of the solar industry has been largely due to state-level programmes, with California
dominating the market.
5.4. Japan
Japan has focused on manufacturing and R&D in the solar PV area, and as a result it is one of the
leading countries in solar PV manufacturing. In 2008, Japanese companies produced more than 1.2
GW of PV cells. 17 Japan has also targeted driving the domestic demand for solar PV, with national and
prefectural governments giving installation subsidies in addition to net-metering. 18 Electric utilities
are obliged to purchase excess electricity generated through PV systems. 19 Japan also has a
Renewables Portfolio Standards Law, which imposes an annual obligation on electricity retailers to
use a certain amount of their retailing electricity from renewable sources. Utilisation targets for each
fiscal year have been set, leading up to a target of 16 billion kWh in 2014. 20, 21
Photovoltaic Technology CSTEP | Page 31