Gujarat Solar Farm Marks Leap for Sustainable Business in India

Last week India took another step forward for sustainable business, with the inauguration of a 500 megawatt solar park in the western state of Gujarat. The state government is investing 105 billion rupees, equivalent to US $2.3 billion, in this precedent-setting project that seems likely to be the first of its size in Asia. When complete the solar park will be capable of producing about as much electricity as a mid-size coal plant. Construction and maintenance of the solar arrays will also provide jobs and economic benefits for nearby communities.

The Gujarat solar farm is an encouraging example of the kind of truly large sustainable business projects that are rapidly taking off in developing countries. However it is worth noting that Gujarat didn’t become a solar power leader by accident. On the contrary, in 2009 the state government passed several policies designed to prompt solar industry investments in their region and encourage the growth of renewable energy. These policies included a 25-year guarantee of fixed tariff rates for solar power, and a decision to waive the normal electricity duty fee for solar projects between five and 500 megawatts in size. Shortly after the new policies were announced, proposals for solar projects in Gujarat began piling up.

This is yet another example of the importance of governments taking the initiative to encourage sustainable business. Gujarat is an ideal place to develop the solar industry; the newly inaugurated farm will receive an estimated 330 days of sunlight per year. However the state would not have seen the solar boom it is now experiencing without a commitment on the part of regional planners to foster sustainable business. The contrast with US federal policy is sharp: last fall in the United States, Congress barely managed to extend tax incentives for wind energy projects for one more year. In Gujarat, the state government has made a 25-year commitment to helping the solar projects grow.

The new farm, as well as other similar projects now in the proposal stages, will be badly needed for Gujarat to accomplish its goal of combating climate change and pollution. As in much of the rest of India, demand for electricity is rapidly growing. By next year the electricity demand in Gujarat is predicted to reach 14,000 megawatts, and the state government wants to produce ten percent of that energy from renewable sources. Later Gujarat and India as a whole will need to make even greater commitments to renewable energy in order to stave off the worst effects of climate change. There’s a strong incentive for India to do this, as the country is likely to be among the non-island nations most severely affected by climate change.

Like most countries around the world, India has a long road ahead of it when it comes to creating a renewable energy economy that thrives on sustainable business. However the inauguration of a 500 megawatt solar farm in Gujarat is a fitting symbol of what this fast-developing country can accomplish, and what India stands to gain in the coming energy revolution.

Photo credit: Pranav Yaddanapudi