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India's First Large Scale Solar Power Plants

Site India
Sector Solar power
Challenge Advance India’s goal of generating more power from renewable sources and bring power to rural areas located outside the existing electricity grid.
Solution An initial loan of $6.2 million to Azure Power to construct a 2-megawatt solar power plant in Punjab. Additional loans for the construction of two other plants have followed.
Impact More power generating capacity brought to rural India; carbon emissions reduced; jobs and development spurred.

Despite the rapid growth and development India has seen in recent years, close to half the country’s population lives in rural villages that are “off the grid” and have no access to electricity. But all of India’s residents, urban and rural alike, have access to hours of sunshine every day. In an effort to make the most of that sunshine, the country has identified the development of the solar power sector as a critical priority and has adopted policies targeting sustainable growth in solar.

In 2009, India was producing about 9% of its energy from renewable sources, and most of that was from wind or hydropower. There were multiple solar plants in the country, but all were small demonstration projects that had been built by the government and did not feed into the national utility grid or operate at peak efficiency.

In 2009, Azure Power obtained a $6.2 million loan from OPIC to build India’s largest solar power plant at that time, a 2-megawatt plant in the state of Punjab, becoming the first independent power producer in the country. Azure, a solar power developer with offices across India and California, is headed by Inderpreet Wadhwa, a native of India, and an American citizen who spent 10 years working in the U.S. software industry before forming Azure Power in 2007. Wadhwa’s vision was to take full advantage of the country’s renewable resources and he saw distributed solar, in which power was generated close to the end user, as the key to bringing power to remote regions and improving the overall livelihood of these communities.

The Punjab plant was completed in 10 months in 2009. Comprised of 7560 solar panels, it provides enough power for 20,000 people in 4,000 rural homes spread across 32 small villages in Punjab.

As Azure Power was able to demonstrate with this power plant, solar technology is not excessively complicated, and it does not become more complicated with scale. With sufficient financial backing, significant expansion was possible. In 2010, Azure Power obtained another loan from OPIC for $26.8 million for construction of a second, 10-megawatt solar facility in the Indian state of Gujarat. In 2011, OPIC approved a loan of about $13 million for the construction of a 5-megawatt solar plant in the state of Rajasthan.

To date the Azure Power projects have created 100 permanent jobs in India, together with about 200 temporary construction positions, and about 15 jobs in the U.S. More than $30 million of exports of equipment and engineering services from the U.S. are expected.

Azure expects to increase its total capacity from 7 megawatts today to 12 megawatts by November 2011 and is targeting a total capacity of 100 megawatts in the next three years, as it builds several more power plants around the country.

By supporting Azure Power’s early expansion and helping it demonstrate the success of its business model, OPIC also helped Azure Power attract other investors supporting the clean technology sector in India.

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