India has witnessed an accelerated growth in the recent past. The consistent growth in GDP has boosted incomes of the Indian people. This in turn has driven up industrial investment and fuel consumption. India faces a significant gap between electricity demand and supply. Demand is increasing at a very rapid rate compared to the supply. India relies on imports for more than 70% of its energy needs. Since a majority of the country's energy demands are met by imports, it puts an enormous amount of strain on the country's import bill. In order to meet the growing energy demand, the country is actively trying to boost production of renewable energy like solar and nuclear power.
Solar based electricity has been around for quite some time. But its presence has been inconsequential. Therefore, it is no surprise that the solar power generation capacity in the country stands at mere 150 MW, a minnow in the country's total installed power generation capacity of 1,82,690 MW. The majority 55% of the installed generation capacity continues to be fuelled by coal. As India struggles to meet the widening energy deficit due to shortage in the availability of coal, solar energy is gaining momentum. Azure power, a private company which operates 36,000 solar panels spread over 63 acre in Khadoda district of Gujarat is one of the biggest examples of India's ambitious plan to use solar energy to help modernize its notoriously underpowered national electricity grid and reduce its dependence on coal fired power plants.
The company has a contract to provide solar generated electricity to a Gujarat government's electric utility. Dozens of developers like Azure, because of aggressive government subsidies and a large drop in the global price of solar panels, are covering India's northwestern plains with gleaming solar panels. So far, India uses only about 140 MW, including 10 MW used by the Azure installation, which can provide enough power to serve a town of 50,000 people. Thus there is tremendous potential for growth.
To encourage the development of solar energy in the country, the government launched Jawaharlal Nehru National Solar Mission (JNNSM) in January 2010. JNNSM has set a target of generating 20,000 MW of grid connected and 2000 MW of off grid solar power by 2022. This programme aims to bring solar costs in line with the cost of other sources of power by 2017. More encouraging steps like setting up of new solar funds to guarantee project financing should be taken by the government because energy security is a serious issue and needs to be constantly worked upon.