Harnessing solar power is now an economic imperative for Asia and no longer just an environmental issue, the vice president of the Asian Development Bank said Monday.

Speaking at the Asia Solar Energy Forum in Bangkok, Xiaoyu Zhao said the region must manage its energy,security and develop sustainable, low-carbon economic growth and wean itself off total dependence on high resource, high carbon development. “Harnessing the power of the sun to fuel Asia’s growth is no longer simply an option, it is a necessity,” he said.

Asia has a very long way to go with solar energy currently producing less than a quarter of one per cent of the region’s power needs. Solar production in Asia currently totals about 500 megawatts (MW), and the ADB wants to increase that to 3,000 MW in three years. That would still represent less than half a per cent of Asia’s overall electricity production, Zhao said, but it is aimed to “catalyze the solar energy industry to potentially contribute 3 to 5 per cent in the near future.” He added that he is keen to see Asia and the Pacific as the leader, and not the laggard, in solar energy development.

The International Energy Agency estimates solar will generate at least 20 per cent of the electricity in the world by 2050, and S Chandler, chairman of the ADB Energy Committee, said most of that new capacity would be in Asia where they have the land, the sun and the technology. The ADB is providing the fourth requirement, money, to get the solar economy up and running, he said. With each doubling of production, the industry will see a price decrease through economies of a scale of 15 to 20 per cent, which will lead to more growth, Chandler said.

“Now it’s minuscule, but Asia should see that 500 MW double by the end of 2011,” he said. Improved technology will also brighten the economics of solar energy. The efficiency of commercial solar panels is improving every year, making solar power more economical in more places, he said. “Solar is already cheaper in places like the Maldives where they have to use diesel generators” to produce electricity.” The turning point will come when solar reaches the breakeven point in big markets like China and Thailand.

ADB is playing the catalyst by funding solar projects to the tune of 2.25 billion US dollars through the Asia Solar Energy Initiative established in May 2010. The same initiative plans to attract an additional 6.75 billion US dollars mainly from the private sector.

According to Chandler, setting up a base that will see the industry “balloon,” and further down the road ensures that the seed money will not be needed as much.