With the per capita energy consumption at 439kgoe, India�€™s energy needs are expected to rapidly expand in the coming years. Based on the growing energy market, there is huge a potential for wider penetration of solar energy in India. 

In the early 1990s, the solar energy program in India received an impetus with the launch of the Solar Photovoltaic (PV) Market Development program by the Indian Renewable Energy Development Agency Limited. The basic objective of this program was to commercialize the production of solar energy and to promote the participation of end users in purchasing systems. Since then, the production of solar PV modules (or solar panels) has been rising steadily across the country. However, in spite of the early adoption of solar energy programmes, India continues to lag behind other countries in terms of market penetration of solar energy. 

Currently, the production of PV modules has increased to around 1 GW per year with the total installed PV capacity of 0.12 to 0.15 GW.  The spread of solar PV applications almost entirely comprises of off-grid and small capacity applications in cities and towns, and in small electrification systems such as solar home systems and lanterns, in rural areas. The ratio of current grid against off-grid in India is very different from the global mix of solar applications, where grid connected PV generation accounts for about 75% of installed capacity with off-grid lighting and consumer applications accounting for the rest. An important reason for larger share of off-grid technologies in the country could be due to the involvement of non-government and private sector organizations in this sector.

However, it is important to note that a large number of off-grid electrification projects in India have not produced the desired result because the focus has largely been on the installation of technologies with little focus on the long-term sustainability of the program. For instance, a study conducted on the village electrification schemes that were funded by North Eastern Council, Government of India indicated that 65% of the solar home systems and 49% of the solar lanterns evaluated were functional. The study revealed that the lack of availability of adequate maintenance facilities as the main reason for non-functional status of most of the devices in the region.

Moreover, lack of consolidated and updated information on growth projections of individual solar projects combined with poor consumer awareness on the benefits of PV technologies has led to the sluggish growth of solar industry in the country.

At present, the non-government market for small, off-grid PV systems is fragmented between major Indian PV manufacturers and numerous smaller system integrators who import their components. Collaboration among various players will help achieve standardization of the best practices in the sector, which can then be disseminated to all implementing agencies. A major advantage of this standardization and dissemination could be the development of micro-enterprises, especially around the project area, which will help sustain the off-grid electrification projects in rural and remote areas.

In addition, the systematic approaches developed and implemented by various non-governmental, private and public agencies across the country should be consolidated. This will not only help in identifying off-grid electrification technologies that could be economical for remote villages but also help in finding out the least cost option for long-term sustainable electrification of rural areas. This would also help in accelerating the wider penetration of off-grid electrification projects in an effective manner and in a shorter time span.

Although the potential for off-grid PVs is high in India, the ultimate objective should be to increase the share of the grid connected PV generation to bring down overall electricity costs in the country. Currently, grid connected solar generation in India is about 2.12 megawatt peak (MWp), which is very small. In order to increase the capacity of grid connected PVs, the Ministry of New and Renewable Energy announced Generation Based Incentives for Grid Interactive Solar PV Generation Projects in 2008. Under the scheme, the Ministry will provide a generation based incentive of a maximum of Rs.15 per KWh for grid interactive solar power plant of a capacity of 1 MWp and above. However the scheme, as it stands, needs to be expanded in scale and requires review to make it more attractive to investors. 

In conclusion, low-cost operation and maintenance of solar PV systems can be achieved through development and dissemination of best practices in the industry, which will ensure large scale penetration of off-grid solar PVs in India. Moreover, development of grid connected solar systems and PV installations working in conjunction with other developed renewable technologies such as wind and small hydro power will further help meet the growing energy needs of the country.