Currently Indian Solar Sector is at loggerheads with State’s Solar Policies over the issue of Net Metering/ Gross Metering and now new connotation “Net Billing “ is popping up, proposed by MERC in their recently released draft policy. Under DCR content, recent MNRE’s push to use mandatorily Indian manufactured solar cells in Indian make PV modules, has pedaled down to its almost crawling stage as by all calculations the overall capacity of Indian manufactured Cells (processed through right from undiffused wafers) are well falling short against in-house Indian PV Module manufacturing capacity and hence objective to support Indian Solar Sector vide DCR push is falling flat. Investor/Developer sentiments are down because of these inconsistencies and also because of lack of financial support/mechanisms from Banks and Institutions. Government is pushing E-mobility without fixing its basic infrastructural requirements.
E-mobility should be encouraged with the utilization of solar energy. Urgent Policy action to incentivize storage solutions needs to be formalized, if India has to emerge as a Storage Hub, we need to act now.
As of June 2019, we have achieved about 31% of the total target set forth by The Government. Breaking it down further, installed rooftop solar comprises a mere 3.5% of the total target. Coupled with the above mentioned roadblocks, the bigger issue lies with the States and State Nodal agencies, who are working independently and dictating their own policies. In order to maintain the trajectory, we need “ONE NATION, ONE POLICY” (like GST) with a single window clearance. It’s high time that this is addressed and steps are taken to align policies, infrastructure, manufacturing and financing, else, we will not be able to maintain this upward trajectory to meet the goals set by the Government of India.
To put it simply, yes. The upwards trajectory of the Indian solar sector can be sustainable. In brief, it boils down to the existence of demand and prevalence of supply. Let us explore the demand. As solar has become economically feasible, since it reached grid parity, there is a clear business sense in adopting the clean energy technology. Additionally, due to the increasing awareness on climate change there has been a growing interest in clean technologies ie. solar energy systems. There are no issues in the perspective of technology adaptability; as it is cost effective, has clear energy savings as well as an impact to mitigate climate change. One of the many contributors to climate change is the use of unclean energy and solar is a much cleaner alternative that directly mitigates those effects. There is, therefore a definite demand for solar in the Indian market. In terms of supply to meet this demand India has in place a vast ecosystem of developers willing to take up these projects.
At U-Solar for instance, we have the expertise and capability of serving clients across India to provide them with customized solar systems. As we develop new innovative projects, it is evident that our market share is increasing year on year. Having said that, the biggest challenges in solar adoption in India are regulatory in nature. Although on the one hand the central government advocates a grand vision for solar adoption, on the other hand the state governments create regulatory obstacles for developers to operate. Policies such as the implementation of gross metering, a cap on total solar capacity allowed, cross-subsidy charges, anti-dumping duty for solar panels and many more are creating bottlenecks in the growth of the solar sector. This is however, something that we hope will evolve and stabilise over time.
Solar power has established itself as the preferred choice globally over the last one decade. The geographical location of India offers supportive grounds for the solar industry. India comes under the tropical region, which receives enormous amounts of solar radiation all through the year, which approximately counts up to 3,000 long hours of sunshine. MNRE estimates show that India’s solar potential is greater than 750 GW.
Recent bids in India have proven that solar power is going to grow as the costs can now compete with any other conventional source. Costs for setting up solar projects has dropped by about 80 per cent between 2010 and 2018 (IRENA analysis).
India is one of the fastest growing economy, the per capita consumption of power is going to grow further with increasing urbanization and demographic expansion. Adoption of EVs is an upcoming wave, poised to tilt the equation towards bigger demand supply deficits.
Sector has witnessed a slowdown in the growth rate of capacity addition, especially during the last one year, this is primarily attributed to the ill-conceived policies, few instances of disregarding the signed and committed power purchase agreements (PPAs), serious land acquisition crunches and delays in strengthening the transmission infrastructure. Another major concern is the liquidity position in the market. The delays in receipt of payments and often generation curtailments from discoms are adding to the woes of solar developers, thereby affecting the investor’s sentiment adversely.
Strong goals will continue to be crucial in pushing the growth of solar sector in the country. If Indian solar sector has to maintain the upward trajectory, it need favorable policies along with how effectively the sector mitigates risks, like, timely implementation of improved forecasting of renewable power as well as demand, alignment of national and state level policies (with their implementation plans), added emphasis on development and operational management of storage technologies, increased flexibility of generation fleet, expansion of transmission corridors, demand side management, developing domestic manufacturing capability and O&M support.
The modular nature of solar can contribute in the penetration of rooftop solar in domestic installation. Flexible financing options for individuals to install rooftop solar would support a faster adoption of solar energy and make it more available, accessible and affordable.