New regulations launching a system of feed-in tariffsA Feed-in Tariff is an incentive structure to encourage the adoption of renewable energy through government legislation. The regional or national electricity utilities are obligated to buy renewable electricity at above-market rates set by the government. (FIT)  for renewable energyRenewable energy is power generated from infinite sources, such as wind or solar power. Conventional energy is generated from finite sources, such as natural gas or fossil oil. were announced by  India’s Central Electricity Regulatory Commission (CERC), based in New Dehli, on September 17, 2009. This is a German model meaning an obligation for utilities to purchase, at a set price, the electricityA form of energy having magnetic, radiant and chemical effects. Electric current is created by a flow of electrons. generated by any renewable energyThe ability to perform work, mainly kinetic, potential, thermal energy, but also in forms of gravitational, sound, elastic and electromagnetic energy. system. This means that now the world’s largest single political jurisdiction now has made an important move towards commitment to developing renewable energy with guaranteed feed-in tariffs. Moreover, they are to include both windWind occurs due to different temperature levels in the atmosphere (troposphere) which are heated up by the sun. A typical example are the trade winds at the equator where the sun is most powerful.. and solar energySolar energy is the light and radiant heat from the Sun that influences Earth's climate and weather and sustains life. For solar energy as a source for renewable energy, look up photovoltaics (solar power) or solar thermal energy..

A comprehensive system of feed-in tariffs has shown to be a great incentive for developers to invest in such new technologies. While China, up to date, has announced feed-in tariffs for wind energy only, it is expected to reveal tariffs for solar energy later this year.

While so far, solar power in India had found it difficult to attain commercial viability, it could now become commercially interesting. Previously, it has generally been pushing forward in niche areas like rural electrification, which is a great opportunity for areas deprived from gridA grid is a network of transmission lines, usually to distribute electric power . connectivity and has raised living standards. But now the two biggest industries in Asia, China and India, are taking action in regard to laggards in the developed world. This is putting developing nations ahead of states such as the US, which have no a national goal of a renewable energy share in their energy mix. This will strengthen their position in the run up to the climate changeClimate change is a lasting change in weather patterns over long periods of time. It can be a natural phenomena and and has occurred on Earth even before people inhabited it. Quite different is a current situation that is also referred to as climate change, anthropogenic climate change, or ... negotiations in Copenhagen. Including the EU  about one-third of the world’s population now have committed to developing renewable energy with feed-in tariffs.

India’s action plan calls for five percent of electricity generationElectricity generation includes all technologies that turn some form of energy into useful electric energy. in India to be from renewable sources by 2010 and to increase one percent per year for the next ten years. After the government of India announced feed-in-tariff to the maximum of Rs 15/kWh in case of grid connected systems in March 2008 West Bengal became the first state to declare FIT at Rs 11/kWh. It has not been said by CERC if they would set specific tariffs or whether each project would apply for tariffs individually. CERC’s regulations are a primer on how to calculate tariffs for each technology.

The system envisaged is comparable to the method used in Europe. They intend to specify a “normative return on equityEquity is the concept or idea of fairness in economics, particularly as to taxation or welfare economics.” used in the calculations of 19 percent pre-tax during the first 10 years, and 24% after 10 years (specifying the tariffs before tax).

The aspirants to invest in solar power include entrepreneurs from all social strata, down to ordinary investors. The stream of applications for setting up solar photovoltaic powerUseful energy can be mechanical energy, for example powering a fan. plants varying from 1 MW to 5 MW has exceeded a figure of 1,000 MW by mid-April, despite the annual limits of 50 MW set by the government. Therefore, the restriction on annual capacity addition, mainly because of fears of FIT subsidy increasing beyond budget outlay, could become an artificial barrier in the process to the growth of solar powerPhotovoltaics (PV) is the field of technology and research related to the application of solar cells for energy by converting sunlight directly into electricity. Solar power is sometimes used as a synonym to refer to electricity generated from solar radiation.. This is a scenario that has happened in several European states, but only proves that the public is keen to install alternate energy systems that lets them feed excess power generated back to the grid and get paid for it. The utility gets power without having to spend on new infrastructure. The individual takes the risk in installing the new infrastructure, but has a guaranteed market in the form of the utility which takes the ‘risk’ in marketing the new power. India generates nearly 700 billion units a year and with 30% loss, consumption paid for is about 490 billion units. If a 2 paisa additional tariff is levied upon each unit it would raise resources to the tune of Rs 9.8 billion that can support annually solar power of nearly 55 MW without much strain on government budget.

Feed-in tariffs have been the force behind the spectacular success of renewablesRenewable energy is power generated from infinite sources, such as wind or solar power. Conventional energy is generated from finite sources, such as natural gas or fossil oil. in countries such as Germany, and are now are followed up by many others (Sri Lanka, Thailand, Latvia, Brazil, Indonesia, Nicaragua, China …)

It’s clearly a positive sign that another economy, and one of 1,1 billion people, is taking up the system and will hopefully have positive impact and set an example for more to follow suit. Once renewable energy is established well enough, it will be profitable in itself, and offer high quality jobs in an ever growing industry.