Solar photovoltaic (PV) power is accelerating the diffusion of renewables around the world, but in the future, soaring commodity prices, input costs and transportation threatens to slow the rate of its growth despite the hike. fossil fuel prices.
China’s energy shortage, which is estimated to control about two-thirds of the solar-grade polysilicon used in panels worldwide, has resulted in a shortage of material supply. The price of polysilicon has more than doubled in a year. The reductions in solar power costs could be reversed within three years and the result could be delays in projects scheduled for 2022 or cancellation, according to reports from the International Energy Agency based in Paris, an intergovernmental organization, and Oslo-based Rystad Energy, an independent energy. research and economic intelligence company.
In this context, it is welcome for more than one reason that the United States International Development Finance Corporation (unknown as DFC) – in accordance with President Joe Biden’s Build Back Better World (B3W) partnership with the G7 countries – approved debt of $ 500 million. -financing of the future installation of solar panels by the American manufacturer First Solar in Tamil Nadu.
Earlier in July this year, First Solar announced plans to set up a thin-film photovoltaic solar module manufacturing plant in Tamil Nadu. With an annual capacity of 3.3 GW, the $ 684 million facility plans to begin operations in 2023 and generate 1,000 jobs. First Solar is also seeking to benefit from the Government of India’s Performance Incentive (PLI) program to promote domestic manufacturing, including high efficiency photovoltaic solar modules.
The B3W partnership seeks to take positive steps to address infrastructure challenges in areas such as climate change and healthcare in low- and middle-income countries in the context of its strategic competition with China. DFC’s loan would help First Solar diversify global solar supply chains to verify China’s solar dominance.
First Solar is already setting itself apart from the competition by not being dependent on supply chains from China by not using polysilicon. It uses a proprietary cadmium telluride semiconductor (CadTel), claiming it has the lowest carbon and water footprint among current photovoltaic modules. The technology would also be better suited to India’s hot and humid climate.
DFC’s loan is a significant gesture by the United States to India in the context of the growing partnership between the two countries in the field of solar energy and the opportunities it opens up in India and around the world. Recently, the United States became the 101st member nation of the International Solar Alliance (ISA), headquartered in India. The President’s Special Envoy for Climate John Kerry made the announcement at the recent UNFCCC climate change conference, also known as COP26. Started by India, ISA is dedicated to helping lower the costs of financing and technology to push solar power. The two countries also have a high-level bilateral partnership, the United States-India Climate and Clean Energy Partnership 2030, to take strong action to help India meet its climate goals. clean energy.
The developments supported by the US government fit in well with Prime Minister Narendra Modi’s announcements at COP26 that India will meet 50% of its energy needs from renewables by 2030, which is expected to be around 20%. of the world’s installed solar capacity by 2040 and the Net Zero target by 2070.
The development also goes well with India’s aspiration to emerge as a key leader beyond its shores. India is working with the UK to connect solar energy supply globally through the Green Grids initiative – One Sun One World One Grid (GGI-OSOWOG), which was launched at the COP26.
DFC’s loan to First Solar is also expected to lead to the establishment of a replicable US-backed solar power model for countries around the world, with India playing a key role as that pilot country. Complement it with India’s plans to expand concessional international financing by $ 2 billion by 2025 under its Indian Economic and Development Assistance Program (IDEAS) through of the Export-Import Bank of India (Exim Bank) to promote solar projects, including Indian exporters, and the pilot is sure to lead to a victory not only for India, but most of the countries of the world.