Is India getting serious about cleantech?

For years, clean technology watchers have pointed to the massive clean technology market potential of India. And for years, they’ve been waiting for that same Indian cleantech market to catch fire.

Well, there are signs that things are indeed smoldering, now.

It stands to reason that India should be a huge market for clean technologies. It’s the world’s second most populous nation behind China, and represents some 17 percent of the people on the planet. The challenges of resource scarcity, urbanization and the rise of the middle class are being felt acutely.

But Indian clean technology policy support and market adoption had been relatively modest until recently, especially compared to China—where government initiatives have accelerated clean technology investment deployment with generous economic stimulus capital and other commitments.

So what’s changing?

Clients of the Cleantech Group have access to weekly roundups of latest important clean technology developments in India (see our Inside cleantech India: Kal, Aaj aur Kal! posts here), and are taking advantage of the macro trends suddenly now creating opportunities for them.

Yet if you’re not a member of the Cleantech Network, you may not know the following, all of which are encouraging datapoints from just the last few months:

Embrace of solar – This summer the Indian government articulated an ambitious, three-phase solar power target to take the country from nearly zero solar production today to 20 gigawatts by 2020.

Called the National Solar Mission, and expected to be launched November 14th (just in time for the global climate change talks in Copenhagen in December, the jaded point out), the plan is to cost $19B USD and take 30 years. Once fully implemented, solar would represent one-eighth of India’s current installed power consumption.

The move is now helping kick local solar deals into action. In recent weeks, the western Indian state of Gujarat has been wooed by a handful of solar companies eager to set up new manufacturing plants (see Seven solar makers eye Gujarat for new production facilities). Interest is tied to a recent wave of approvals from the Gujarat government for solar power plants. In January, Gujarat announced a sweeping policy to encourage solar energy, even offering 25-year fixed-rate tariff contracts.

In theory, India is ideal for solar. It’s densely populated and receives considerable solar radiation (technically “insolation”, i.e. the measure of solar radiation energy received on a given surface area in a given time—not to be confused with insulation.)

A large, 35,000 km² area of the Thar Desert has been set aside for solar power projects. But solar has traditionally been cost prohibitive. Much of India does not have an electrical grid, so initial applications have focused on water pumping to begin replace the country’s four to five million diesel water pumps, and off-grid lighting.

Talking ‘bout a revolution – On India’s Independence Day August 15th, Prime Minister Manmohan Singh called for global partnerships with as many countries as possible to more quickly address climate change, even invoking rhetoric of the need for a second Green Revolution in India (the first of which saved the country from mass famine in the sixties.)

He announced the decision that the government took to set up eight missions in this regard. He also stated that on Nov. 14 the government will launch the Jawaharlal Nehru Solar Mission to increase the use of solar energy throughout the country.

The Prime Minister also said more attention should be given to programs for water collection and storage. ''Save water should be one of our national slogans,'' he said.

Looming water crisis? – India’s Prime Minister isn’t the only one thinking about water. Two new reports in August gave new urgency to efforts to reduce water use in the country’s agriculture sector (see Will cleantech mobilize to prevent water shortages in India?)

The Indian government's new State of the Environment report warned: "Groundwater reserves are becoming more and more depleted even as surface water sources become too polluted for human use."

And a study in the journal Nature presented new data on groundwater depletion in India. NASA satellites suggest the water table in India is falling 1.6 inches per year, losing 109 cubic kilometers (88.4 million acre-feet) from August 2002 to October 2008.

The study attributed the depletion to massive pumping of underground water, mostly for irrigating crops. India's irrigated land tripled to 33.1 million hectares (82 million acres) from 1970 to 1999, i.e. ushering in the first Green Revolution—the only way the country could sustain the population it has today.

What water investment opportunities will this create? Aside from technology providers selling equipment, will it inspire new models for decentralized, technology driven water solution providers that could find success not only in India, but in other markets worldwide?

As the Cleantech Group has learned itself firsthand after several years of having an office in India, it’s not easy to work in the country. Monsoons, sporadic Internet access, rampant poverty and other challenges all get in the way of affecting change.

But if developments of the last few months are any indication, change is indeed coming to the clean technology markets of India. And with change, as the wise know, come opportunities.

 

Dallas Kachan is a managing director of the Cleantech Group, a leading provider of clean technology research, events and advisory services, and publisher of this web site. In October, the Cleantech Group presents Cleantech Forum XXIV Delhi, the largest, most important annual gathering of clean technology professionals from India and around the world. Attend and profit yourself from the growth of cleantech in India. More information here »