Investing in Solar Energy in Asia

Feature | 24 April 2012

As part of ADB's ongoing mission to promote solar investment across the region, experts and investors have gathered in Jodhpur, Rajasthan for the 4th Asia Solar Energy Forum to explore the latest trends and issues.

ADB.org speaks with S.Chander, Director-General of the Regional and Sustainable Development Department about the quest to kick start the use of this clean, virtually inexhaustible power supply in the region.

What has been holding solar back in Asia?

Solar is expensive and it requires long-term work to make it succeed in a systematic way. A lot of preparation is required before you can commission the first project and then say this is a worthwhile venture.

It's only when the Europeans - particularly the Germans and the Spanish - put money into it and brought down the cost and made it into more of an industrial application that solar became much more of a viable option for Asia.

What are the challenges of getting projects off the ground?

The first thing is solar is land-intensive - you need a lot of empty land to put your panels on. A coal plant would need one tenth of the land compared to solar. You also need countries with vast expanses of land that has no alternate use.

Solar naturally requires a lot of sunlight. ADB has zoned in on parts of Asia that have the maximum productivity for solar energy coupled with the least cost of land and essentially this are the desert areas of the People's Republic of China (PRC), India, Mongolia, Uzbekistan, Kazakhstan, and Pakistan.

What have been the recent breakthroughs for solar energy in Asia?

  • Solar technology is about 50 to 60 years old but only took off in 1995- 1997 when Germany took the lead in its development.
  • According to the Renewable Energy Policy Network for the 21st; Century, solar photovoltaic technology is the fastest-growing power generation technology globally, spread across 100 countries.

When we started the Asian Solar Energy Initiative in 2010, developing Asia was producing less than 500 MW of solar energy. In one year, we have managed to catalyze more than 800 MW more, which is 130% more than what Asia had previously. This has really helped drive the costs down and basically, the more we install, the more costs will reduce.

Through ADB financing, the largest solar energy plant in Asia, if not the world, has been built on the plains of Lopburi, Thailand, and has been generating clean electricity for around 70,000 homes. We are also seeing great moves in India, as well as the opening of an ADB-backed research facility in Uzbekistan, a country which is considered the next frontier in solar.

The forum is in India? Why?

India is a rising power in the solar energy scene and a lot of people are interested in its technology and price trends. The money is flowing in too - in the last 18 months, the private sector has put roughly $1 billion into solar power generation facilities. Crucially, there is strong backing from the government, particularly as India has increasing energy demands at a time when it is crucial to reduce greenhouse gases and diversify sources of energy.

More generally we have found our forums a very powerful platform for governments and investors to openly discuss solar issues. When you want to sell something that is desirable for the world, desirable for climate change and the long-term energy security for particular countries, we find it works best in group settings where people can discuss the issues amongst themselves.

How solar can a nation go?

If you do a theoretical computation, India and PRC could go 50% solar but it will never happen because it makes the system unreliable - when you have too much of one kind of energy source, which is intermittent, you have to do many things to keep it under control. The maximum we would suggest is 10%. Today we are less than 1%.

ADB has solar panels on its headquarters in Manila, which will be in operation in June. What message are you hoping to send?

We want to have an exponential scaling up in the Philippines. We want people to set up manufacturing facilities and invest because there is one thing you cannot replicate and that is ground conditions. If you want to evaluate solar development in Manila, you have to put it in Manila. You cannot simulate Manila conditions - it just doesn't happen. So if you have to do something in Asia, you have to bring it to Asia.