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Organizations world over have realized the need for re-structuring themselves and adapting business processes to be able to survive in the global scenario. This process of change management from an old hierarchical structure of Organization to a Business process oriented organization began two decades ago. What has aided the new design is the development of […]
Should Robots be Taxed ?
The Increasing Threat Posed By Automation Automation is changing the world that we live in at an increasing pace. With each passing day, the capabilities of robots are increasing more and more. They are becoming a sort of pseudo human race as they have acquired almost all the thinking capacity that a human has. With […]
Introduction to International Business
With the globalization of the world economy, there has been a concomitant rise in the number of companies that operate globally. Though international business as a concept has been around since the time of the East India Company and continued into the early decades of the 20th century, there was a lull in the international […]
Different Levels of a Process – Viable System Model
An organization can be viewed as a collection of processes. At the grass root level, an organization is nothing but an arrangement of humans and technologies in a specific manner to achieve pre-determined objectives. However, work is divided amongst various processes to increase efficiency and effectiveness. However the functions of all processes are not the […]
Trust is the Key to Building Successful Companies and Great Nations
The Importance of Trust in Building Successful Companies and Great Nations Recently the former Prime Minister of India, Dr. Manmohan Singh, made an impassioned plea for building trust among the economic agents and between the citizenry as that would have a salutary effect on the country’s economy. In a hard hitting article, Dr. Singh, decried […]
Globally, there has been a push, and a movement towards renewable sources of energy given the fast depleting reserves of oil and coal as well as due to concerns over climate change and global warming brought about due to the burning of fossil fuels such as oil and coal.
Indeed, it has been estimated that the present oil reserves would show declines in the way they are extracted wherein the cost of drilling and pumping each barrel of oil would exceed the returns from them.
In addition, it is also forecast that the present capacity of the members of OPEC (Organization of Petroleum Exporting Countries) would not be able to meet the burgeoning demand from emerging markets such as India and China where the rising levels of consumption mean that more energy is needed to fuel their growth (literally and metaphorically).
Though the discovery of the reserves in the United States to do with shale oil and other sources promises to continue the “fossil fuel party” by a few decades, the fact that such deposits of oil need to be extracted using environmentally polluting techniques such as Fracking means that there is a high cost to b paid in terms of ecological and social costs such as contamination of the ground and the water sources.
Indeed, for us to continue our dependence on fossil fuels, the future generations have to pay the price regarding global warming and climate change which are powerful drivers of the push towards renewables.
In this context, it is worth noting that the Paris Accord on Climate Change signed in 2015 mandates the signatories to move away from fossil fuels and towards renewables with an explicit focus on developing countries in the Global South.
Indeed, if not anything, China and India seem to be enthusiastic in the push towards renewables which as we would discuss subsequently is the main driver of the Indian Government’s ambitious plans to draw 100 GW (Gigawatts) of new sources energy from renewables by 2022.
Thus, the Indian Solar Industry stands to benefit from this push towards renewables and given the fact that the target of 100 GW includes 75 GW of Solar Capacity, one can understand why investors are bullish on the Indian Solar Industry.
Indeed, the push towards renewables and especially solar in India resembles the Gold Rush of the Twentieth Century wherein wildcatters, prospectors, and others made a scramble to dig and prospect for gold in California when there were signs that there was plenty of gold deposits there.
In the same manner, global and domestic investors are flocking to India with a view of tapping the next big business opportunity that offers lucrative returns in a low yield world.
Indeed, the fact that the solar opportunity presents a golden chance for the investors looking for growth and yield has resulted in global investors such as Softbank and domestic bigwigs such as Bharti Airtel to bet big on the Indian Solar Industry.
While these developments indicate positive signs, the fact that there are fears of a bubble wherein the massive investments being made into the Indian Solar Sector do not seem to justify the returns, and the future gains have made some experts question whether there is a bubble being inflated as far as solar investments are concerned.
Indeed, already some of those who had bid for solar projects find themselves unable to sustain the momentum and are now considering exiting their projects.
Further, the bids for solar capacity are going as low as between Rs 1 and Rs 2 per unit when the prices for other renewables is almost double that means that the fears of a bubble are not entirely unfounded.
Moreover, the fact that solar is yet an untried and untested source of energy in the Indian context means that there is a need for caution and circumspection as well. Many Indian States enjoy extended periods of sunlight and summer and hence, some of this optimism might be warranted.
Especially, when one considers the fact that many North Indian States such as Rajasthan are desert and arid regions, installing solar capacity there which is what is happening at the moment, might be very productive for the investors.
Thus, what we have is a situation where there is both optimism and caution among investors and hence, the correct term to use to describe the present situation is that there is cautious optimism among the players in the Indian Solar Sector.
Also, many investors are turning the heat on with their aggressive bidding and fast movement into the sector which is transforming the once laid-back Solar Space to a vibrant and sunrise (literally and metaphorically) sector.
Considering all the points made so far, our view is that it is early days for the Indian Solar Industry and given the fact that the PV or the Photovoltaic cells that make up the Solar Panels are yet to be tried and tested in the Indian Context though European Countries such as Germany have been using them successfully means that the mood of cautious optimism is indeed warranted.
To conclude, India is standing at the threshold of a Renewable Energy Revolution, and the Solar Sector is the place where the action is and hence, something that can indeed propel India into the global League of Nations that are renewable energy driven.
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What the Current Wave of Protectionism and Populism mean for the Future of Globalization and Free Trade
February 12, 2025
