The Indian government has accorded a slew of incentives to propel the growth of the solar segment.
May 1, 2018
4 min read
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India is a power hungry nation. A recent report by International Energy Agency (IEA) has predicted that India would be the fastest growing energy consumer and market by 2040. The forecast promises a bright scope for the renewable energy sector. The recently- concluded meeting of International Solar Alliance at Gurgaon is a shot in the arm at India’s efforts to promote solar energy.
With India among the founding partners of this global alliance and at the helm of heralding a paradigm shift from conventional energy to renewable energy, it would be imperative that efforts towards promoting clean energy are increased manifold. Currently, a host of developments such as the thrust from the government, reverse auctions, lowering of prices of solar panels and wind turbines have given a fillip to the renewable energy sector.
According to the November 2017 report of Bloomberg New Energy Finance (BNEF), around 715 MW of capacity was added across the country in the last fiscal as compared to 227 MW in the previous year, taking the country’s total installed capacity to 1.3 gigawatts. Indian solar installations registered a record 123 percent growth to reach 9.6 GW in 2017, which was more than double the 4.3 GW installed in 2016. Renewable energy sources now account for 32.2 percent of the total installed capacity in the country, with the renewable installed capacity growing faster than conventional sources in 2017 for the first time. The onus is now to sustain the momentum without losing the sight of the overall target.
The Indian government has accorded a slew of incentives to propel the growth of the solar segment. Among its recently proposed initiative is Sustainable Rooftop Implementation for Solar Transfiguration of India (SRISTI) encompassing financial assistance of worth Rs 23,450 crore ($3.7 billion) from the government. In =the new scheme, the Ministry plans to offer a maximum financial assistance of Rs 18,000 per kilowatt with a maximum covered capacity of 0.5 kilowatts in the residential sector. Similarly, the institutional, commercial and industrial sectors will receive a maximum financial assistance of Rs 5,500 per kilowatt with a maximum covered capacity of 2.62 kilowatts. The government is also mulling to introduce the ‘rent- a- roof concept’. Under this scheme, a developer will take rooftops on rent offering a lease to each household and subsequently feed the power to the grid.
Hindrances in the Growth of Solar Capacity.
However, it would be pertinent to note despite ‘growth of sorts’ achieved in the solar segment in the past few years; certain impediments continue to hinder India’s smooth ride towards achieving the solar energy targets. The residential solar rooftop segment is yet to take off due to lack of awareness among customers regarding incentives of rooftop policies, an absence of economies of scale, multiple regulatory approvals required for net metering which act as impediments in the residential rooftop segment. Net metering is an important enabler for encouraging the growth of the residential solar segment. At present, there is a lot of ambiguity in the net metering policies.
Although the majority of states have the net metering policy, it continues to be unregulated in states like Andhra Pradesh, Odisha, Tamil Nadu, and West Bengal, where they only have legally non-binding guidelines. Indian power distribution companies or discoms, which are already reeling under losses, are wary of the policy as it would hurt their finances. The need of the hour is to provide incentives for the generation of solar power rather than on installation of solar rooftop systems.
Also, the process of availing subsidies should be made completely centralized and hassle-free. A system of proper energy audits needs to be instituted which can help to reduce the carbon footprint, save energy and money and avert an energy crisis.
A lot more needs to be done on the generation of awareness regarding the benefits of solar energy and skilling the manpower. It would be unfair to rely solely on the government efforts to promote solar energy. The thrust needs to come from corporates as well.
There is also a strong need to push for wider-scale implementation of public-private partnership models. The need of the hour is bottom-up approach’ involving solar initiatives stemming from the grassroots level. Solar training workshops will go a long way in making masses aware of the benefits of the solar energy besides equipping them with the necessary skills to tackle the solar energy revolution. Initiatives by corporates such as undertaking solar installations at hospitals, schools and other public institutions as part of CSR mandate will go a long way in encouraging adoption of solar energy. The road ahead for India may be bumpy but certainly worth in the long run.