Solar Energy in India at the Federal Level is facing massive problems but the state level initiatives are pushing ahead.Gujarat has been at the forefront of promoting Solar Energy recently setting aside a 3000 acre site for 500 MW of Solar Power Generation.First Solar,the Cd-Te Leader and Producer of the largest number of Panels in 2009, has got an order from Acme Telepower for 15 MW Plant to be constructed in March 2011.Note First Solar is the also the lowest cost producer of solar panels in the world currently and looks to be so in the foreseen future as well.First Solar is expanding capacity by almost 50% in 2011 after a slow 2010 and looks upon India as one of its most important markets.

The biggest problem is that the winners of the Solar PV Projects are mostly unknown small firms who have bid so low that make the returns negative for investors according to the renewable energy ministry officials (MNRE).Bidding has gone as low as 23c/Kwh which is crazily low considering the debt costs in India are as high as 13% annually.Compare that to China where debt is priced as low as 3-4% and the winners are huge utilities.With even India’s Tata Power saying that the projects are not bankable as their is confusion how the electricity tariffs will go to developers,its difficult how these unknown firms could manage the financing .While the companies will lose their bid deposits if they don’t finish the projects,Indian Solar Energy will be the biggest loser as the failure of the Phase 1 of JNNSM of 1000 MW by 2013 will lead to even further delays.Already JNNSM has been criticized by a parliamentary panel for the tardy progress.Note some states have taken the lead in pushing solar energy on their own,namely Gujarat which aims to put up more than 500 MW in the next year or two.

NextEra Energy Resources which was previously known as FPL Energy has bought a number of Solar Energy Generating Assets in the past few months.NextEra is the largest Renewable Energy utility in the USA with around 18 GW of Capacity out of which around 6.5 GW is Gas and 7.5 GW of Wind Powered Capacity plus 2.5 GW of Nuclear Energy.NextEra Energy with its long experience in Green Energy Generation has now decided to expand its Solar Asset Portfolio buying equity stakes in Solar Thermal as well as Solar PV Farms in USA and Canada.NextEra Energy is already the biggest Wind Energy Producer in the United States and on the way to become the biggest Solar Energy Producer as well.While Wind Energy is facing uncertain times in the USA,Solar Energy is growing at a rapid clip driven by the sharp fall in Solar Panel Costs which have more than halved in the last 2 years.

Gujarat has been the biggest promoter of Solar Energy in India amongst all the other states.The State has already implemented a clear and forward looking Renewable Energy Policy with emphasis on Solar Energy.It has signed PPAs with a number of solar project developers under its State Solar Subsidy Scheme.While other states are looking mainly towards the federal subsidy scheme JNNSM to push Solar Energy Generation,Gujarat is looking to push Solar Energy on its own.Gujarat now has reportedly acquired 3000 acres at Charnaka village in Patan District which it will give to solar project developers to install solar panels.

The Trend of State Government Individual Companies Partnering in Renewable Energy Manufacturing to generate Green Jobs is increasing in the last year.Individual provincial governments in Canada,China and South Korea have recently signed deals with major Renewable Energy Companies to set up Manufacturing Plants in their respective provinces.The government gives various incentives such as land,tax breaks,assured markets,cheap loans in return for huge green investments from the companies.This gives a strong boost to the provinces which are fighting it out with other provinces for Green Dollars.While the process may not be exactly democratic and lead to an ideal selection,it does lead to faster implementation and guaranteed jobs in an increasingly tepid global economy.The latest province to join the bandwagon in a major way is Hebei province in China which has tied up with Chinese Wind Turbine Producer Ming Yang Power.Note other Chinese provinces have also tied up with Chinese Renewable Companies to increase Alternative Energy Investments in their regions.

France has halted its solar feed in tariff bubble putting a moratorium on new applications for installing solar panels above for 3 kw installations.This has been done after applications for solar panels exceeded the 500 MW per year target set up by the French ministry.The Prime Minister called the solar feed in tariff subsidies reaching a “veritable speculative bubble”.France has already changed its solar feed in tariffs 2-3 times in 2010 as it tries to fine tune the subsidies so that renewable energy investors earn a decent return.However the fast decrease in solar panel prices has caught the bureaucrats off-guard which is not surprising.Feed in Tariffs in general have been badly designed by most public authorities around the world leading to huge bubbles.Czech has suffered from the biggest solar subsidy bubble on which it recently cracked down through taxes,50% cut in tariffs and other measures as electricity rates increased sharply as subsidies ballooned.Spain and Italy have found their Feed in Tariffs leading to runaway subsidies while Germany which has the most successful FIT program too had to cut FIT by a single ad hoc measure in order to prevent a bubble.