Renewable Energy: Does the government have a strategy?

By: Staff Reporter

New Delhi, March 17 (G’nY News Service): Brijesh Nair, Senior Project Manager at Intersolar India, which works towards organizing business to business interactions, in a conversation with a G’nY correspondent, offered a profound overview of the solar power sector. Their annual event the Intersolar, an exhibition and a conference, showcases the entire solar industry value-added chain from India and abroad.

The government plans to increase India’s solar energy capacity to whopping 100GW in the next 7 years. How do the present provisions aid the scheme?

India has already about 3 GW of solar capacity against which the government has announced its ambitious goals to achieve about 100 GW by year 2022. There has been a marginal increase of funds of about 62 billion INR in the planned budgetary allocation, but we still need enormous amount of funds and planning to reach the desired goal in the given time.

Apart from this, the government has also taken measures, such as custom duty exemption for the inverter assembly and photovoltaic (PV) manufacturing. Despite this, there is a risk of underfunded new programmes being started with negative consequences.

Also very few players in the market have received good returns and a common concern of the industry is the unavailability of finance. As soon as the returns are attractive, there will be plenty of finance for the industry.

We all know the inevitable fact that solar power will be the most effective source considering the ever growing demand for energy in the country. Which means eventually the market will be available by default and not by design. Even the government is aware of it. So it is but obvious that the government needs to come up with a concrete plan as well as remove all possible bottlenecks to achieve the targets that have been set out.

What has been done to incentivize the investment of private companies in solar power?

The investments in renewable energy power projects mainly come from the private sector. The government provides some incentives in the form of generation based incentives, viability gap funding etc.

Besides, fiscal incentives such as accelerated depreciation, concessional customs duty, excise duty exemption, income tax holiday for ten years, and preferential tariff are provided for renewable energy power projects.

The ministry has proposed to reduce the subsidy on rooftop solar power plants. What would that mean for the solar power industry?

Unlike other successful solar powered nations, India has not been able to capitalize on the huge potential it has in the off grid and the roof top solar power plants.

The new National Democratic Alliance government, through the Ministry of New and Renewable Energy (MNRE), has set a target of 40,000 MWp of grid interactive solar rooftop systems during the next five years. However, it has proposed to reduce the capital subsidy for solar PV for rooftop systems from 30 to 15 per cent, citing reduced cost of solar PV panels and a competitive tariff of Rs.7 per unit that can be achieved without subsidy.

This is applicable for systems ranging between 1KWp to 500 KWp. The Ministry has asked project developers to go ahead with their projects without waiting for subsidy allocation via Aadhaar linked account or interest subvention.

As per the existing home loan and home improvement loan schemes, solar PV is not covered among items against which loan can be availed. In a current development, the Ministry of Finance has issued following advisory to all public sector banks,“All banks are advised to encourage the home loan/ home improvement loan seekers to install rooftop solar PVs and include the cost of such equipment in their home loan proposals just like non solar lighting, wiring and other such fittings”.

This will reduce the dependence on private investors who are a hesitant towards investing in solar projects, and will enable owners to plan their home loan with inclusion of capital cost for installing solar rooftop.

This is mainly aimed at encouraging residential, commercial, industrial and institutional setups to adopt viable grid interactive solar rooftop systems for their own consumption, and inject surplus electricity into the grid. Solar rooftop regulation/policies/schemes in states like Delhi, Rajasthan, Haryana, Uttar Pradesh, Uttarakhand, Kerala and Karnataka will further attract investors and residential consumers towards Solar Rooftop Power.

What are your thoughts on the present government’s strategy on India’s push towards solar power?

Have clear cut road map in achieving the fivefold revised target, removing all bottlenecks and encouraging more private players to participate from India and abroad.

As part of recently organized investors meet by the MNRE, 387 companies/firms (both private and public sectors) have submitted Green Energy Commitment Certificates (GEC), aggregating to about 270 GW power generation capacities during the next five years.

The solar city programme aims at minimum 10 per cent reduction in projected demand of conventional energy at the end of five years, through a combination of enhancing supply from renewable energy sources in the city and energy efficiency measures. The basic aim is to motivate the local governments for adopting renewable energy technologies and energy efficiency measures. In a solar city all types of renewable energy based projects like solar, wind, biomass, small hydro, waste to energy etc., may be installed long with possible energy efficiency measures depending on the need and resource availability in the city.

Raise more funds through public-private-partnership for all new state level projects.

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