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National Solar Mission (NSM) Phase 1 Batch 2 Bid Results: Why they are more than just numbers

National Solar Mission (NSM) Phase 1 Batch 2 Bid Results: Why they are more than just numbers

The results of the round two of the NSM surprised everyone with the price of solar energy falling to INR 7.49 per unit. A large part of the success of the NSM must be attributed to the government. However, the larger implications of this would be outside solar projects driven by government subsidies. The next few years would see a boom in entrepreneurs riding the “captive wave”.

The major effect of this transition would be
to open up the solar market to India’s small and medium entrepreneurs. Commercial
viability of solar is a silver bullet to India’s small entrepreneurs – spread across India’s many
cities, towns and villages. Entrepreneurs can bootstrap themselves by avoiding costs bank
guarantees and previous experience in installing solar plants (as the NSM and state policies
require). The mushrooming of several entrepreneurs providing solar solutions will see two
effects:

1)   India reaches its solar goals much quicker than expected – outside the government schemes – due to the scalability of these smaller solar models.

2)   Solar energy prices nosedive further due to large demand – opening up the market to the rural and residential sector.

While this outlook looks promising, India is still a very difficult place to start a business. A World Bank survey rates India as one of the worst places in the world to start a business. Issues such as licenses and registrations can take up to several months, not to mention the stifling red-tape. Starting clean and staying clean is a tremendous challenge to India’s entrepreneurs. The other issue is the hesitancy of local banks to lend money to start-ups without any collateral – exactly what start-ups lack.

Despite these hurdles, the energy is palpable and one sees several success stories. The coming years, therefore will be decisive in India’s move to meet its solar goals – with India’s multitude of entrepreneurs driving it forward.

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