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Which major policy improvements will play a key role in developing the Indian Solar Industry?

Perspectives
Typography

Mr. Prashant Panda, President, Solar Business, ACME Solar

Let us first understand why there is a thrust on developing Renewable power plants in India. The peak shortage is currently shown to be around 2-4% and of course we have latent demand for which efforts are going to bring into the system which would heighten the peak demand further. Most of the load is being met through fossil fuel based power plants which is about 186 GW, installed capacity, which are working at the PLF of about 58% on an average. Further, Fossil fuels are finites in nature. Therefore, to serve the demand in an efficient way and to use fossil fuels in an optimized manner, it is time for all of us to look for alternative energy sources for our future energy needs and Renewable fits into this very easily. 

The government has realized the criticality of this sector and is restructuring areas that needs attention. Further, with a target of 100 GW by 2022, coming through solar energy based power plants, It will continue to drive renewable energy installations. The intent of Government of India is very clear and the kind of support which this sector has been receiving is phenomenal. That means, the thrust is not only on the policy framework but also on the implementation.  

I personally feel that following major policy improvements will be needed to further develop the Indian Solar Industry:  

• Exemption of renewable energy (RE) from Goods and Services Tax (GST).

• Timeline to commission large Solar Power Plants should be increased from present 12-13 months to 18-24 months (depending upon the size) as timely acquisition of the appropriate land parcel is the biggest challenge for solar projects. 

• The government must ensure infrastructural facility for power evacuation.

• The concept of solar energy based SMART grid must be developed in a timely manner.

I am sure, Government is aware about the issues mentioned herin and working towards resolving these. As a private Solar Power Developer, we are committed to create a cleaner environment for our future generation.

Mr. K.V. Sajay, Executive Vice President – Solar Business Unit, Gamesa Renewable Private Limited

Solar Power is witnessing tremendous growth driven by the falling cost of energy & ambitious goals of the government. However, the power sector needs to adapt to the changing landscape as renewable energy takes center-stage. Evacuation constraint and payment security is paramount to ensure that investors are protected and continue to invest in the future growth of the sector. The Government is aware of this and is making incremental changes to ensure that the sector is progressing as expected. 

Wind-Solar Hybrid Policy: The proposed Wind-Solar Hybrid policy is a welcome move that provides a huge opportunity to existing wind farms to add solar capacity. Initial studies indicate that solar and wind generation is highly complementary and hence, the wind farms could be loaded upto 60% with solar power without upgrading the grid infrastructure. This not just reduces costs, but enables efficient usage of existing evacuations lines. Coupled with a small storage system, this architecture has the potential to provide predictable and firm supply in the near future.

The industry is eagerly anticipating the final policy and also guidelines and orders by the respective state agencies and ERCs to facilitate the implementation. 

Payment Security: The Government is working on creating a fund to enable SECI to support developers in case state discoms default on payments. This provides a cushion for SECI to operate and provides an extra level of comfort to developers. 

The UDAY scheme is a very important initiative as it aims to fix the financial woes of discoms permanently. Though most states have signed the MoUs, it is yet to be seen how it will impact the financial and ATC situation of discoms. If successful, this will be the most important Investor confidence building initiative across the power sector and not just renewables. 

Mr. Gagan Vermani, Founder & CEO, MYSUN

The Indian Solar story has been quite rosy over the last few years, especially during the last 18 months, when the price of solar power from large-scale farms touched closer to Rs 4/kWh mark. In the process, most solar analysts have been proved wrong.

A lot of this price drop can be attributed to reasons other than sound ‘economics’. Many projects ‘bid’ at these aggressive tariffs have either not seen the light of the day or are delayed, and a number of large solar developers are no longer there in the game today.

India needs more ‘executed’ projects on ground than more ‘allocated’ projects on paper.Therefore, for a sustainable growth, it is imperative to not get blinded by these low tariffs in the short-term and look for long-term policy interventions and course corrections:

1. The price-discovery mechanism would work better in India, atleast for the next few years, so as to develop a broad consensus within the industry and all other stake-holders, including the banks and the government, on the real cost of solar power.

2. The solar parks, complete with all infrastructure, including the transmission, should be ready even before the bidding for solar starts. Solar deployment takes only 5-6 months but the solar parks take years to develop, so better to focus on completing the park’s infrastructure first.

3. Rooftop solar, having 40% of the 100GW solar mission target is mostly ignored in our quest to quickly get MWs. This is one area which can become bigger than the utility-scale solar. Right from effective implementation of net-metering, doing away with the subsidies and DCR conditions, smart grid management to participation of discoms and availability of financing are some of the areas which would help grow this segment.

4. Sustained effort on creating ‘demand’ for solar amongst the energy consumers. Effective tools and innovative business models are needed for this. And the government needs to provide an enabling regulatory and implementation environment for the same.