India's power sector has a total installed capacity of approximately 1,46,753 Megawatt (MW) of which 54% is coal-based, 25% hydro, 8% is renewables and the balance is the gas and nuclear-based. Power shortages are estimated at about 11% of total energy and 15% of peak capacity requirements and are likely to increase in the coming years. In the next 10 years, another 10,000 MW of capacity and investment of about Rs. 24 lakh crore are required.

Fortunately, India lies in sunny regions of the world. Most parts of India receive 4-7 kWh of Solar radiation per square metre per day with 250-300 sunny days in a year. India has abundant Solar resources, as it receives about 3000 hours of sunshine every year, equivalent to over 5,000 trillion kWh. India can easily utilize the Solar energy or Solar Power. Today the contribution of Solar power with an installed capacity of 9.84 MW, is a fraction (< 0.1 percent) of the total renewable energy installed 13, 242.41(as on 31st October 2008 by MNRE). Solar power generation has lagged behind other sources like wind, small hydropower, biomass etc.
But now realizing the potential of Solar energy, Prime Minister of India unveiled a National Climate Change Action Plan in June 2008. The plan will be implemented through eight missions with main focus on Solar energy in the total energy mix of the country.

Development of alternate energy has been part of India's strategy for expanding energy supply and meeting decentralized energy needs of the rural sector. The strategy is administered through India's Ministry of New Renewable Energy (MNRE), Energy development agencies in the various States, and the Indian Renewable Energy Development Agency Limited (IREDA).

MNRE – Ministry of New Renewable Energy is the nodal Ministry of the Government of India for all matters relating to new and renewable energy. In 1982 Department of Non-conventional Energy Sources (DNES) was created to develop and deploy new and renewable energy for supplementing the energy requirements of the country. In 1992, DNES became the Ministry of Non-conventional Energy Sources. In October 2006, the Ministry was re-christened as the Ministry of New and Renewable Energy. The Ministry has been facilitating the implementation of broad spectrum programmes including harnessing renewable power, renewable energy to rural areas for lighting, cooking and motive power, use of renewable energy in urban, industrial and commercial applications and development of alternate fuels and applications. In addition, it supports research, design and development of new and renewable energy technologies, products and services.

IREDA – Indian Renewable Energy Development Agency is a Public Limited Government Company established on 11th March, 1987, under the administrative control of Ministry of New and Renewable Energy (MNRE) to promote, develop and extend financial assistance for renewable energy and energy efficiency/conservation projects. IREDA has been notified as a &ldquo;Public Financial Institution&rdquo; under section 4 &lsquo;A&rsquo; of the Companies Act, 1956 and registered as Non-Banking Financial Company (NFBC) with Reserve Bank of India (RBI).

SEC - The Solar Energy Centre (SEC), established in 1982, is a dedicated unit of the Ministry of New and Renewable Energy, Government of India for development of Solar energy technologies and to promote its applications through product development. The institute was set up with a view to encourage research in the field of Solar technology as a viable alternate energy system. The centre itself is built taking into account principles of passive Solar design to reduce energy consumption in the building. This is achieved by reducing heat gain in summer, encouraging effective ventilation, natural cooling and effective insulation to prevent heat loss during the winter, thus reducing both heating and cooling costs.

Involvement of various players in the energy sector, such as local industries, the private construction and operations contractors, Central Electricity Authority (CEA), MNRE and others, has helped in increasing the capacity and capability of local technical expertise and further sustain the development of Solar power in India in the longer term.

Solar Industry in India gained momentum with the contribution of Private organizations. Many Indian companies have planned major investments in this industry. The government has approved projects of Chandradeep Solar (for an R&D unit); Neotech Solutions; Photon Energy Systems; Surana Ventures; and RamTerra Solar Pvt Ltd.

Tata Power and BP Solar joint venture had been the leading Solar Photovoltaic (PV) manufacturers for the last many years. Moser Baer India Limited has entered the Solar sector in a big way with both crystalline silicon cell technology and thin-film technology.

Earlier this year, Khandelwal Solar Power Limited (KSPL), Reliance Industries, Titan Energy Systems, Nano Tech Silicon India and XL Telecom & Energy also proposed to invest in the Solar Industry.

As a result of the efforts made during the past quarter century, a number of devices have been developed and have become commercially viable. These include Solar Water Heaters, Solar Cookers, Solar Lanterns, Solar Street Lights, Solar Water Pumps.

India has started wide Solar Photovoltaic Program for about 2 decades and has installed an aggregate 1.3 million systems. However, now the focus of the 11th year plan is on the grid connected power generation. India's Integrated Rural Energy Program using Solar energy had served 300 districts and around 2,300 villages.

The production during 2007-08 (till December 2007) is estimated to be over 40 MWp of Solar cells and 60 MWp of PV modules.

The Research and Development (R&D) efforts in the Solar Photovoltaic technology have been aimed at development of materials used in fabrication of Solar cells and modules, different types of Solar cell device structures, module designs, components, sub-systems and systems, with a view to reduce the cost and improve the overall efficiency at different stages. The Ministry has been sponsoring Research and Development projects on different aspects of the PV technology in academic and research institutions, national laboratories, IITs and industry, for development of new materials, processes, systems, production and testing equipment for Solar cells and modules and electronics used in the PV systems.

There are number of R & D projects are going on Solar PV Program in India.

• The Solar Energy Centre has been established by Government of India as a part of MNRE to undertake activities related to design, development, testing, standardization, consultancy, training and information dissemination in the field of Solar Energy.
• Recently, development of polycrystalline silicon thin film Solar cells and small area Solar cells concluded at the Indian Association for Cultivation of Science at Jadavpur University.
• The National Physical Laboratory, New Delhi is working on development of materials and process to make dye sensitized nano-crystalline TiO2 thin films.
• The Centre for Materials for Electronics, Pune has been working on development of phosphorous paste for diffusion of impurities in Solar cells.
• Under a joint R&D project of MNRE and Department of Science & Technology (DST), the Indian Association for Cultivation of Science (IACS), Kolkata continued to work on optimization of process for fabrication of large area double junction amorphous silicon modules.
• Indian Institute of Science, Bangalore to develop efficient electronic system for connecting small PV systems to the grid.
• Indian Institute of Technology Bombay to work on development and testing of low concentration PV systems.
• The scientists at the Indian Association for Cultivation of Sciences, Jadavpur continued their work on development of nano and multi junction silicon thin film Solar cells and optimization of the performance of multi junction thin film Solar cells through computer modeling.
• A proto type Solar car was successfully developed and demonstrated by the students of Delhi college of Engineering. The car operates on Solar power, which is stored in storage batteries. In one charge the car is capable of traveling about 70 km. The maximum speed of the car was demonstrated at 60 km/hr. The Solar car was also displayed in the 9th Auto Expo held in New Delhi during 10-17th January, 2009.

High Capital Cost
The hunt for better, cheaper Solar cells is due in India. Despite the fact that the price of Solar Photovoltaic technology has been coming down over the years it still remains economically unviable for power generation purposes. The average cost of Solar PV modules was around Rs. 2 lakhs per kW. However, the estimated unit cost of generation of electricity from Solar Photovoltaic and Solar thermal route is in the range of Rs. 12 -20 per kWh and Rs. 10 - 15 per kWh respectively in India. With present level of technology, Solar electricity produced through the Photovoltaic conversion route is 4-5 times costlier than the electricity obtained from conventional fossil fuels.

Manufacturing Process
Solar PV cell manufacturing is a technology-intensive process requiring high expertise and know-how. Besides, the technology landscape in the Solar industry PV space is changing quite rapidly with innovations and R&D. It is challenging for new entrants to replicate the success of companies having a long standing in the Solar PV market.

Raw Material and Waste Products
Some of the materials (like Cadmium) used for producing Solar PV cells are hazardous and other raw materials like plastics used for the packaging of the cells are non-biodegradable, thereby impacting the environment. Although some of the wastage generated during the manufacturing process is recyclable (silicon), not all other materials are recyclable and disposal of the same is a challenging process.

Environmental Costs:
Another concern area is installing Solar cells on the land area. The large amount of land required for utility-scale Solar power plants - approximately one square kilometer for every 20-60 MW generated - poses an additional problem in India. Instead, Solar energy in particular requires unique, massive applications in the agricultural sector, where farmers need electricity exclusively in the daytime. This could be the primary demand driver for Solar energy in India.

In the very near future, breakthroughs in nanotechnologies promise significant increase in Solar cell efficiencies from current 15% values to over 50% levels. These would in turn reduce the cost of Solar energy production. However, capital costs have substantially declined over the past two decades, with Solar PV costs declining by a factor of two. PV is projected to continue its current rapid cost reductions for the next decades to compete with fossil fuel. However, the realization of cost reductions is naturally closely linked to market development, government policies, and support for research and development.