AFTER IT and pharma, India is on course to emerge as a solar hub. The Centre’s move to offer fiscal incentives to solar cell and photovoltaic (PV) manufacturers coupled with surge in global demand for renewable energy sources has triggered domestic and multi-national companies to set up shop here.

Leading the pack is home-grown Moser Baer, followed by US-based Signet Solar and Solar Semiconductor. More are set to join.

Moser Baer, a leading optical storage manufacturer, is in talks with the Andhra Pradesh government to acquire 100 acres in the Fab City — the chip-making hub.

The company was among the first to set up a wholly-owned subsidiary - Moser Baer Photo Voltaic Limited — in 2005 to focus on the high-growth solar energy segment. It also plans to build an Rs 330 crore silicon PV manufacturing facility (near Delhi) and has tied up with Applied Materials Inc for technology transfer.

US-based Signet Solar, on its part, has drawn up an ambitious $2 billion investment plan to set up three photovoltaic production facilities in the country. It is also looking at an R&D base here. The company is already in talks with the Andhra government to set up two manufacturing facilities here. Solar semiconductor — another photovoltaic manufacturing company — has lined up an initial $40 million investment to set up two production units.

The company has already started building a 30MW per annum plant near Pochampalli. The second one — with a capacity of 40 MW — is being readied in the Fab city. ”We are looking at garnering another $330 million from private equity firms,” said Solar Semiconductor CEO Hari Surapaneni.

The company has also signed supply agreements with two European companies. Global demand for solar PV products and services is expected to grow from $14 billion in 2006 to over $100 billion by 2015. Political and environmental concerns have triggered many countries to shift to solar energy. Globally, solar energy panels come with a capacity of 1.7 giga watt. Nearly 70% of it is in Europe.

The Energy and Resource Institute (TERI) fellow (renewable energy technology application) Shirish S Garud attributes the new found rush for solar PV facilities to the semiconductor policy announced by the Centre in February this year.

The incentive for these units is in the form of a 20% capital subsidy and an exemption from countervailing duty on imports.

Over the last few years, developed countries are also encouraging the use of solar energy. The PV market worldwide is growing at about 40% and solar energy production is set to top 1,000 MW per year.

“However, these companies may find it tough to sell it in the domestic market as the cost of producing solar energy is high. The cost of production ranges from Rs 15 to Rs 30 per unit compared to around Rs 2 to Rs 6 per unit for thermal energy. Developed countries are ready to pay the cost while the Indian government is still mulling over it,” he said.