Sutanu Guru on how 'bidding' is often a farce in India On the face of it, the news seems extremely positive. Andhra Pradesh recently invited bids for ten 50 MW solar power projects under the National Solar Mission. The response was overwhelming. The total bids received amounted to 5,500 MW - ten times more than required. Even more heartening, and surprising, is the fact that in many of the bids, the per kilo watt hour cost of power works out to about Rs 5. If that does pan out, India is indeed on the cusp of a Green Energy Revolution. And the oft-repeated statements of Power Minister Piyush Goyal about India generating 100,000 MW of solar power by early next decade appears credible. So is it time to stand back and start applauding? Wait. As with most things in India, there could be a catch. The landscape is littered with examples of "low cost" and transformational Public-Private Partnerships that have flattered to deceive, or even hoodwink if you prefer so. Across a broad range of infrastructure projects, private sector companies have won contracts through aggressive bidding. Almost invariably, after the project is in the bag, the private companies have announced that they are unviable since there has been significant escalation in costs. In many cases, financial audits and other investigations have discovered that the "transparent and open" bidding process that led to the award of infrastructure projects was often a sham, or a scam. Just three examples will show how. The most egregious example of this is the issue of gas supply from the famous (or notorious) KG basin by Reliance Industries Ltd. When the Government of India awarded the exploration, discovery and exploitation rights of the KG basin to a consortium led by Reliance, it was estimated that the gas supplied from the KG basin will be priced at $2.34 per btu. For Indian companies investing in downstream projects like power and fertilizer plants, this was a dream come true. And tens of thousands of crores were committed to building power and fertilizer plants that would get gas from the KG basin; at $2.34 per btu. Reliance Industries even signed a commercial agreement with state owned NTPC to supply gas at $2.34 per btu. We all know what happened after that. A few years down the road, Reliance claimed that the capital costs were far higher than originally estimated and that it would not be viable to supply gas at $2.34 per btu. Reliance then wanted to sell the gas at more than $4 per btu; and then at more than $ 8 per btu and then again at more than $12 per btu. Power and fertilizer plants that were depending on gas from the KG basin have been left high and dry and billions of dollars lent by banks for these projects have become "distressed assets"; euphemism for loans that might never be repaid. The KG basin gas mess is yet to be completely sorted out. The second high profile case of a "prestigious" infrastructure project becoming an albatross for consumers was the privatization of the Delhi Airport. Once again, there was "transparent and open" bidding and an emerging super star of infrastructure called GMR won the project by quoting a total cost in the region of Rs 4,600 crores. A few years after it bagged the project, GMR announced that the costs were far higher than originally estimated and the project was unviable unless it was allowed to charge a development fee to every passenger that walked through the Delhi airport. Astonishingly, GMR was allowed to charge Rs 200 from domestic passengers and Rs 1,200 from international passengers and keep charging till an incensed Supreme Court ordered an end to this practice. From the initial estimate of about Rs 4,600 crores, the final cost ballooned to more than Rs 13,500 crores. The "consumers" in this case, airlines and their passengers continue to bear the brunt of this alleged "gold plating". Incidentally, both the KG basin gas and the Delhi Airport privatization project have received blistering criticism from the CAG. The third such project was the Delhi Airport Express Metro line. This was another PPP venture between Delhi Metro and a consortium dominated by the ADAG group. The same story was repeated here. Costs were far higher than initially estimated and ADAG "discovered" that the project was not really commercially viable. In 2013, it withdrew from the project and the line is now being operated by the state owned Delhi Metro. So before cheering the Rs 5 per kilo watt hour price of new solar energy projects coming up after "transparent and open" bidding, let's look at the fine print. The devil always lies in the details.
Read More
The issue of level-playing field for US solar equipment manufacturers following the World Trade Organization's (WTO) ruling against India will be taken up during Prime Minister Narendra Modi's visit to the US later this month. Narendra Modi will be in the US from September 24-30. According to a report in The Telegraph, commerce ministry officials said India was likely to appeal against the dispute settlement panel's ruling, which could offer a two-year breather to India. There can also be a bilateral arrangement with the US because it is an important trading partner. Last month, a WTO panel has ruled against India in a dispute raised by the US over the country's solar power programme, requiring the government to offer a level playing field to both foreign and domestic manufacturers of solar panels. The US filed a complaint in the WTO in February 2014 alleging discrimination by India's national solar mission against American products. The US raised the dispute over the Indian government's imposition of local content requirements for solar cells and solar modules. The Centre has offered financial support of up to Rs 1 crore per megawatt (MW) to the implementing agency for setting up large solar capacities by placing orders with domestic manufacturers. WTO members are not supposed to insist on national content requirements that discriminate against foreign products. Governments are also required to provide "national" treatment, under which imports must be treated on a par with domestically manufactured products. Officials maintained that the WTO ruling would not have an impact on the ambitious target to raise solar power generation capacity by five times to 1,00,000 MW by 2022 at an investment of around Rs 6 lakh crore. After reaching the target, India will become one of the largest green energy producers, surpassing several developed countries. The US is keen on grabbing a slice of this market, according to several reports. India is vital to the US because it is the second-largest export market for US solar products and its national solar programme — which is among the most ambitious in the world — is set to grow 20-fold during the next decade. Solar power has triggered a series of trade disputes as countries around the world try to reduce their dependence on fossil fuels by developing homegrown renewable power industries. This is the second case that India has lost to the US at the WTO. In June, the WTO's appellate body upheld an earlier ruling against an Indian ban on poultry meat and eggs supplied by American producers. The ban had been imposed to prevent an outbreak of avian influenza. In a confidential report issued to the US and India last week, a three-member dispute settlement panel headed by the former New Zealand envoy, ambassador David Walker, pronounced that New Delhi violated global trade rules by imposing local content requirements for solar cells and solar modules under the Jawaharlal Nehru National Solar Mission (JNNSM), according to a report in Mint. The WTO panel's ruling comes in the backdrop of Narendra Modi's Make in India programme, aimed at attracting foreign investment and turning India into a manufacturing hub. India needs as much as $200 billion to meet its green energy target to install 100 gigawatts (GW) of solar power and 60,000MW of wind power by 2022. India Ratings said it expected a strong growth in solar power installations over the next 4-5 years, driven both by the government impetus of 100GW of solar power by 2021-22 (60GW through grid connected solar projects) and a decline in generation costs.
Read More
India has closed bids for a third of its target of tendering 15,000 megawatts (MW) of solar projects this fiscal year, a government official said, and is expecting interest from investors such as SoftBank to lift the industry.The tenders are part of Prime Minister Narendra Modi's ambitious plans to raise solar capacity five fold to 100,000 MW by 2022 to meet India's growing power needs, create jobs and fight climate change without committing to an emission target."We are creating the base for big companies like SoftBank and Foxconn to participate," Upendra Tripathy, new and renewable energy secretary, told Reuters on Monday. "We want big players to come in, costs to come down and targets to be met."Japan's SoftBank this month announced plans to set up a company to invest $20 billion in India's renewable energy industry, with Taiwanese iPhone maker Foxconn and India's Bharti Enterprise as minority partners. SoftBank's executives have met both Modi and Tripathy.Indian resources conglomerate Adani Group has all but ended a deal with US company SunEdison for a solar equipment plant, only to start talks with Softbank and Foxconn for investments, sources said.So far this fiscal year India has closed tenders for about 5,000 MW of solar power and is seeking bids for 5,000 MW more, Tripathy said.Government-controlled companies Solar Energy Corp of India and NTPC Ltd have issued most of the tenders, along with states such as Madhya Pradesh in central India. SkyPower, Acme Solar, Suzlon Energy and SunEdison have been among the winners.Tripathy said though companies were keen to invest and solar power was already competing with fossil-fuel derived electricity, central and state governments would have to make it easier for businesses to buy land.(Reuters)
Read More
India's Adani Group is in talks with Japan's Softbank and Foxconn, maker of Apple's iPhone, to secure investment in a $3 billion project to make solar cells and panels in the country, two sources with knowledge of the matter said. Prime Minister Narendra Modi's government expects clean energy to yield business worth $160 billion in India in the next five years, based on the country's power generation targets. Softbank, Foxconn and Bharti Enterprises have already pledged to invest about $20 billion in solar projects in India. A new deal with Adani, one of the country's largest conglomerates, would boost Modi's efforts to promote manufacturing and create sorely needed jobs. One of the sources, who is involved in the negotiations, said that over the past few weeks, the billionaire founder of the mines-to-power Adani Group, Gautam Adani, had held talks with Softbank Chairman Masayoshi Son and Foxconn head Terry Gou. "(Adani) are talking to Softbank, they are talking to Foxconn. They may partner with both of them. Something will be finalised in the coming few months," the source said. Both sources said the deal was yet to be finalised. Under the current discussions, Softbank and Foxconn, which have a string of planned and executed in investments in India, could directly inject money into the project. Foxconn Technology Group, Softbank and Adani all declined to comment. One of the sources said the talks had gathered pace after Adani and U.S. solar power company SunEdison two months ago ended a $4 billion agreement struck earlier this year, on a similar project. "That deal could not mature," said the India-based source. "They were charging too much on the technology fee." A SunEdison spokesman declined to comment. Here Comes The SunUnder the planned project, Adani is looking to set up a plant to produce 3 gigawatts (GW) of solar cells and panels, probably in Modi's home state of Gujarat by 2020, said the source. Adani is based in the state and is said to be close to the prime minister. The first phase of 1 GW will be completed by 2018 and the company has already started buying equipment for it. India is relying on renewables to fight climate change rather than committing to emission cuts like China, arguing that any target could hinder economic growth vital to lifting millions of its people out of poverty. Modi has set clean-energy targets including raising solar capacity fivefold to 100 gigawatts (GW) by 2022, as India's peak power demand doubles over the next five years from about 140 GW now. But most of the investment in the sector is expected to come either from foreign investors or companies such as SunEdision, Trina and First Solar. (Reuters)
Read More
From now onwards, government will put in place a warranty clause in renewable energy projects to ensure that the infrastructure is maintained and repaired to ensure functionality, the Lok Sabha was informed today.Replying to questions, Power Minister Piyush Goyal said governments in the past had not given importance to the aspect of warranty but but the present regime will put in place a clause of five-year warranty for maintenance and repair of infrastructure of renewable energy projects.He said the Ministry of New and Renewable Energy is implementing important programmes such as the national biogas and manure management programme, unnat chulha programme, bio gas (off grid) generation programme, biomass gasifiers programme and remote village electrification programme.It is also disseminating solar lights and solar cookers for meeting cooking, heating and power needs in the remote and rural areas of the country.(PTI)
Read More
Enfinity Philippines Renewable Resources Inc., a subsidiary of Enfinity N.V. a leading solar energy developer in Philippines has appointed India’s leading Solar EPC Sterling and Wilson to set up their 28.6 MW solar photovoltaic power plant in Sanroque, Digos, Davao, Philippines. In a major boost to the ‘Make in India’ campaign SWL has gone one step further by winning this project in the global solar market against big competition and proving that an Indian Solar EPC can compete globally and proudly say ‘Installed by India’. Sterling and Wilson, which began its operations in 1927 as Wilson Electric Works, is a group company of the 150 year old $2.5 billion business conglomerate - Shapoorji Pallonji Group, and is one of India’s leading MEP services provider. India’s growing reputation as a technically competent, quality conscious, and cost effective solutions provider has been further enhanced as Sterling and Wilson was selected ahead of well entrenched international solar EPC’s to partner Enfinity in setting up its solar power plant. This project will be constructed under the Department of Energy (DOE) Philippines Solar Power Procurement Program under the Feed-in-Tariff mechanism. The solar power plant capacity is expected to be around 28.6 MW (DC) / 24.75 (AC). The output power will be evacuated through a 69 kV substation and overhead transmission line of 8 kms to the nearest NGCP substation. Sterling and Wilson will use Hanwha’s Solar one modules of 310 Wp power rating with central inverter solution for this project. Speaking on the solar power plant to be set up for Enfinity Philippines Renewable Resources Inc. Bikesh Ogra, President, Sterling and Wilson, Electrical & Solar Business said, “The fact that we are one of the only Indian Solar EPC to have already set up solar projects in the International market gives us immense motivation to work harder. With human assets of nearly 3500 technically proficient people working from India and abroad, we possess an inherent strength to execute international Solar projects in an efficient and cost effective manner. We are confident that our superior engineering capabilities, experience, and expertise in setting up solar power plants internationally will enable us to deliver Enfinity Philippines Renewable Resources Inc. with a solar solution that will exceed predicted plant performance levels.” No terrains are too tough for Sterling & Wilson when it comes to setting up efficient solar power plants. Technologically advanced services and comprehensive know how of thin film, mono crystalline, and polycrystalline modules; along with different foundation of ramming and rafting type leads the organization to provide best solutions to its customers internationally. SWL will brave incessant rainfall, cyclones, land divided by creeks, and thunderstorms to deliver the project within six months from the beginning of July 2015. Based on the site recce report and engineering interactions with Enfinity Technics Global, Sterling and Wilson will install pipe culverts for road crossing at 4 locations where the project intersects with a creek. Sterling and Wilson has also suggested a piling foundation for structures as the land has significant presence of boulders. The structural design will take into consideration high wind speeds of up to 200 km/hr and cyclones that are common phenomenon in this region. As the creek divides the plant, the array layout will be prepared as per site contours without affecting the generation as well natural water flow. The drainage system will be provided for discharge of rainwater into the existing natural stream.
Read More
Solar power promises to change the way electricity is generated in the country, and it has an impact on the real estate sector as well, writes Ashwinder Raj SinghWith PM Narendra Modi raising the target of solar electricity generation from 20,000MW to 100,000MW by 2022 at a cost of $100 billion, the market for everything solar has suddenly come to life. As pollution and the rising cost of power hits the consumer, more and more people are becoming attuned to living a 'green' life. Keeping this in mind, many upcoming residential projects in cities across India are using solar power as their primary energy source. Homeowners can also install their own solar panel-based systems to benefit from this technology if it has not been installed a project level. Solar Systems For Individual HomesFirstly, a buyer has to decide what his energy requirements are based on electrical equipment in use in the house. A solar system is good enough for major electrical appliances except for water heaters and air conditioners, for which separate, higher-capacity solar panels are available. A solar panel works best on a flat terrace, rather than on slanting surfaces. To access maximum sunlight, the panel should be placed away from shadows.Cost of Installation and MaintenanceEven though the upfront cost of installing a solar system is on the higher side, it pays off in the long run and eventually proves economical compared to conventional means of power. A roof-top solar system will cost approximately Rs. 1 lakh per KW (this cost is excluding the cost of batteries) before various incentives offered by different states and electricity boards. It has a life of 25 years and will deliver 90% efficiency in the first 10 years of installation, and about 80% from years 11-25. Batteries account for almost 30 per cent to the cost of the total system.To generate 2000 watts of electricity, one would need around 200 sq. ft. of space on the terrace. As far as maintenance is concerned, the only cost incurred in a good quality solar system is that of changing the battery, if it is a battery-supported panel. Otherwise, the solar panels are totally maintenance-free except for regular cleaning to remove dust, bird droppings, etc. Tips For HomebuyersWhile planning to buy a new house in a society that offers solar power:Calculate the cost of solar power generation and compare it with energy rates of the utility company in the area.Ensure that branded and high-quality solar panels are installed at non-shadowy place, and that there is a proper maintenance scheduleIf battery-supported panels are used, ensure that the distance between panel and battery is low, as energy is lost with longer distances. It is beneficial to have solar powered batteries for best results.Ask about the expected life of the solar panels, and the warranty given on the system.The other components of the system - inverter, wires, etc. should be of top quality, as lower quality will lead to faster wearing out and add on to the maintenance cost. For inverters, the best option is a pure sine wave model. This is slightly more expensive, but very efficient and long-lasting.Capitalizing On SubsidiesSince the cost of batteries is prohibitive, various state governments and electricity boards are offering subsidies along with special deals. Any surplus power that a residential solar panel generates can be sold back to the government-operated grid at good prices. For example: if the building’s requirement is 5 units of power and the solar panel generates 7 units, the extra two units can be sold back to the grid. On rainy our cloudy days, if only 4 units are generated, the additionally required 1 unit can be sourced from the grid, which is chargeable. However, at the end of the month, if the net outage of power towards the grid is more than inflow, the society or individual home owner stand to make a profit.Performance So FarGujarat has taken the lead in solar power generation, and is ahead of all other states with a commissioned capacity of 929MW, followed by Rajasthan at 840MW generation. Madhya Pradesh, Maharashtra, Karnataka, Punjab and Haryana are now coming out with very aggressive solar power policies focusing on not only giving massive subsidies of as much as 30% on installation, but also attractive buyback offers on power.Going forward, solar power is going to make a decisive change in consumers' strategies for buying homes. For developers, it has become imperative to include solar power generation as part of their project cost, and to install the best possible systems to attract potential clients who are willing to pay a bit extra for living in environment-friendly homes.The author is CEO - Residential Services, JLL India
Read More
Solar power is likely to become cheaper than or equivalent to conventional thermal energy prices over the next two to three years and reach Rs 4/kWh-Rs4.5/kWh by FY18, says India Ratings and Research (Ind-Ra). This will be driven by a decline in capital costs (solar modules and other balance of plant), an increase in efficiency and a shift towards large solar photovoltaic projects leading to the economies of scale and lower return expectations by developers. According to International Renewable Energy Agency, solar photovoltaic prices have fallen nearly 80 per cent since 2008. Additionally, solar module efficiency has witnessed an annual increase of 3.5-4.5 per cent. The increasing size of projects to 10MW and above from 5MW earlier also leads to the economies of scale in component procurement and better absorption of fixed costs. Moreover, the return expectation of developers is likely to moderate as the market matures, leading to a reduction in overall tariffs. The recent solar bids conducted by MP Power Management Company Limited with per unit prices reaching as low as INR5.05/kWh are suggestive of the above trends. Globally in a recent bid, NV Energy, a Nevada utility, agreed to purchase 100MW solar power under a fixed-price 20-year power purchase agreement at 3.87cents/kWh (INR2.43/kWh). Ind-Ra expects a strong pick-up in solar power installations over the next four-five years, driven both by the government impetus of 100GW of solar power by FY22 (60GW through grid connected solar projects) and a decline in solar power generation costs. These factors will increase the affordability of solar power for distribution companies and eliminate the requirement of government support by way of subsidies or viability gap funding (VGF). Ind-Ra sees a limited possibility of support by way of VGF, greater focus on infrastructure creation for the evacuation of solar power and higher possibility of distribution companies meeting their renewable purchase obligation. The solar space has already seen a significant decline in tariffs. Solar tariffs declined to Rs 7.49/kWh-Rs 9.44/kWh in in Jawaharlal Nehru National Solar Mission phase I, Batch II during FY12 from Rs 10.95/kWh-Rs 12.76/kWh during FY11. In phase II, Batch I, the concept of VGF was introduced and the tariffs declined to Rs 5.45/kWh. However, the current tariffs are even lower than those offered by through VGF. The recent coal-based bids for the purchase of thermal power by Andhra Pradesh saw tariffs in the range of Rs 4.27/kWh-Rs 4.98/kWh, only 1-14 per cent lower than the solar tariff of Rs 5.05/kWh bid recently in the MP Power Management Company power purchase tender. The feed-in-tariffs (FITs), outlined by respective state electricity regulatory commissions based on the cost-plus return on equity model, have also seen a significant decline. FIT for solar energy in Gujarat was lowered to Rs 8.03/kWh in FY15 from Rs 12.54/kWh in 2010. FIT for solar energy in Rajasthan has been declined to Rs 6.74/kWh for FY16 from Rs 15.32/kWh in FY11.
Read More
France is determined to invest in India’s renewable sector, reports Arshad KhanAmbassador of France to India, François Richier, has affirmed that France will help India to develop renewable energy for sustainable development. Richier said that French companies will produce 10 per cent of the 100 GW of solar energy under the Make-in-India Initiative.“India has huge potential to generate electricity from renewable sources like solar and nuclear. France is very determined to invest in India’s renewable sector,” said the ambassador on Wednesday (July 8). He further said that there is a huge business opportunity for both French and Indian companies to tap the renewable sector.The ambassador further said that France is ready to invest in research and technology to increase the efficiency of domestic solar and nuke plants. He said, “currently India’s nuke energy accounts for 3 per cent of its total electricity produced compared to France’s 75 per cent in the same. There is a huge potential for growth in the sector and the government of France will lend its full support to develop technological innovations.”He added, “our main motive is to control the global temperature by 2 degree by the year 2020. This can only be achieved when nations all over the world agree to move from conventional source of energy to renewable source. India is this regard has a very important role to play as it the fastest emerging nation of the world.” Finance will be provided from the $10 billion green fund to encourage entrepreneur to invest in renewable energy.Indian entrepreneurs present at the event welcomed the gestures made by the French authorities. Gaurav Sood, MD of Solairedirect said to BW| Businessworld, “the move may lower the current rate which is Rs 6.50 per unit and will boost the supply chain. The major problem we face is the availability of land to set up solar plants and the cost of finance which is relatively higher.”Investors around the world are rushing to invest in India’s solar energy sector. A multi-billion dollar deal has been signed between three global giants, SoftBank, Bharti Enterprises and Foxconn. Collectively named SBG Cleantech, the three-way venture plans to invest $20 billion over 10 years. Earlier in March US-based First Solar Inc., Sun Edison and China’s Trina Solar Ltd planned to set up manufacturing facilities in India. Madhya Pradesh, Gujarat and Rajasthan have emerged as the top destination for Investment.
Read More
Solar power in India is well set to come into its own over the next few years from the perspective of both financial viability and availability. There is going to be an exponential growth in distributed solar energy, coupled with new storage techniques, which will bring noticeable changes to India’s energy spectrum. The future of Indian energy segment is here and going forward, by all accounts, it is the sun that will power our economic and energy growth into the next millennium. Solar, thanks to its distributed nature, has the potential to significantly reduce the current energy peak deficit and improve delivery. This is however based on the assumption that solar energy will get its due in terms of adequate financial support from the central and state governments. Ever since, the government announced its ambitious National Solar Mission, there has been intense competition among states for solar power generation. Individual states are launching tailor-made schemes to leverage solar power to its fullest potential. However, when it comes to their solar potential, there is considerable disparity among states, so much so that each state is taking a different route towards solar power generation. States like Madhya Pradesh and Maharashtra are going all out to set up large-scale solar power projects. On the other hand, agricultural states, like Punjab and Haryana, which rank relatively lower in estimated solar power potential, are finding it difficult to make land available for large solar projects. These states are trying to get a grip on the situation by setting up solar projects on available spaces like rooftops and canals. To understand what trajectory the solar mission is taking, we must first take stock of how much the top solar power producing states across India are contributing to the mission, their potential as well as limitations, and the current extent of support from the central government. Gujarat, the state that contributes 15 percent to India’s renewable energy basket, has the highest installed capacity (of about 900 MW as of June 2014) in the country. But considering that it is already a state with surplus power, the government has relaxed its approach towards solar power generation. In the recent past, there have been no significant additions to solar power generation sources in the state. Because the solar power potential of the state (37.55 GW) is still not fully exploited, there is a need to revisit the solar policy with special emphasis on rooftop projects. There is also a need to develop robust energy transmission infrastructure that will enable power-rich Gujarat to transfer energy to energy-deficient states. Rajasthan is also one of the top states in terms of solar power generation, along with the highest solar potential (142.31 GW). However, the state’s installed power capacity is 839 MW, no more than a fraction of its overall potential. The state is blessed with high solar radiation and enjoys 325 sunny days a year, making it a favourable destination for players in the solar industry. The downside is that dusty weather causes significant production loss due to soiling (that is, accumulation of dust on the surface of the solar unit) while extremely high temperature leads to photovoltaic losses. The state’s new solar policy and Bureau of Investment Promotion Rajasthan have come up with attractive packages for the solar sector. Meanwhile the state government is exploring possible incentives, including exemption on electricity duty and entry requirements, along with customized packages for investors in solar projects. Shekhar DuttMadhya Pradesh has an installed capacity of 353 MW and Maharashtra, 286 MW. Both states have over 60 GW each of potential solar power. These states have significant wastelands and have ambitious plans to turn them into large-scale solar power plants to quench their energy needs. While Andhra Pradesh is power surplus, the state is nowhere close to realizing its solar potential. The state has only 234 MW of installed capacity versus an overall potential of 38.44 GW. One of the main challenges in the way of solar generation is joint demand by solar, wind and new energy sectors for reduction in cross-subsidy surcharge. Sector players argue that single-window clearances for power projects are only on paper and there are still no permissions in sight despite much effort. To overcome this, the state government has now decided to offer 'deemed permission' to entrepreneurs as part of a new industrial policy, but we will have to wait and see if the policy is going to be effective. Tamil Nadu currently stands at a 104MW of installed solar capacity, with a 17.67 GW of solar potential. The state came up with an ambitious policy in 2012, but is facing challenges in terms of grid balancing. The mood around solar is generally upbeat in the country, but there are bottlenecks across states holding back the full impact of solar growth. A major issue is the poor transmission infrastructure between states. This needs to be addressed soon if we are to achieve any breakthrough in the solar space. The solar power industry has great prospects for growth, but is still at a nascent stage, growing in a much disarrayed fashion. India’s current solar power installed capacity is around 3 GW, which is less than 0.5% of the estimated potential (750 GW). This clearly points toward a huge opportunity ahead of us. Perceptive of this, the Indian government has increased fivefold its target for capacity addition in solar power. Instead of the initial target of 22 GW by 2022, the government now plans to add 100 GW capacity. Consistent government initiatives are required at such a formative stage. And many initiatives like the Jawaharlal Nehru Solar Mission, the setting up of the Solar Energy Corporation of India, R&D support for the solar mission, and 100% foreign direct investment are all nudging the solar mission towards a higher destiny. Solar power policies, for their part, should encourage efficient generation, wherein capacity is added only after proper assessment of all resources, including scarce resources like land and funds. This alone will ensure secure and long-term supplies of solar energy which means instead of accelerated depreciation (AD), generation-based incentives (GBI) should be considered as a suitable incentive for both solar and wind.Taking a cue from the global renewal energy circuit, experts here suggest that AD should be withdrawn in favour of an overall cut in the corporate tax rate. It has been documented that such economy-wide tax breaks enable overall macroeconomic benefits. The Ministry of New and Renewable Energy (MNRE) must ensure a level-playing field, with no preferential treatment meted out to PSUs. And more clarity in the policies would be a welcome change. Shekhar Dutt is Director General, Solar Power Developers Association (SPDA)
Read More
