IAS Gyan

Daily News Analysis


13th April, 2022 Environment

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Context: India is likely to miss its 2022 target of installing 100 gigawatts (GW) of solar power capacity, largely due to inadequate uptake of rooftop solar.

Present solar energy status:

  • As of December 2021, India’s cumulative installed solar capacity is 55GW.
  • With grid-connected utility-scale projects contributing 77% and the rest from grid-connected rooftop solar (20%) and mini or micro off-grid projects (3%).
  • Only about 50% of the 100GW target, consisting of 60GW of utility-scale and 40GW of rooftop solar capacity, has been met.
  • Approximately 19 GW of solar capacity is expected to be added in 2022 (15.8GW from utility-scale and 3.5GW from rooftop solar).
  • Even with this capacity addition, about 27% of India’s 100GW solar target would be unmet.
  • On the current trajectory, the report finds, India’s solar target of 300GW by 2030 will be off the mark by about 86GW, or nearly a third.


Need for raising solar capacity:

  • Solar energy is an important pillar of India’s commitment to address global warming according to the terms of the Paris Agreement, as well as achieving net zero by 2070.


Impeding factors

  • Factors impeding rooftop solar installation includes
    • pandemic-induced supply chain disruption to policy restrictions
    • regulatory roadblocks
    • net metering limits
    • the twin burdens of basic customs duty (BCD) on imported cells and modules and issues with the Approved List of Models and Manufacturers (ALMM)
    • unsigned power supply agreements (PSAs) and banking restrictions
    • financing issues plus delays in or rejection of open access approval grants; and
    • unpredictability of future open access charges.


What can be done?

Report suggests following short and long term measures:

  • uniform policies to apply nationally for at least the next five years.
  • consistent regulations for net metering and banking facilities, which should apply nationally.
  • strict enforcement of renewable purchase obligations (RPO) of companies.
  • Government should push aggressively for expediting solar capacity addition to achieve the 100GW target by 2022 by re-allocating some of the unmet rooftop target to utility-scale generation.


Challenges faced by solar energy sector:

  • Land scarcity:Per capita land availability is a scarce resource in India Dedication of land area for exclusive installation of solar cells might have to compete with other necessities that require land
  • Fall in prices:Due to government incentives, the price of solar power has been falling which can disincentivize the producers and affects quality of solar energy installations in India
  • Issues with Rooftop Solar:
  • Homeowners at large have not been installing solar panels at roof top This is because small deployments naturally cost more than grid-scale farms Homeowners do not generally consume all the energy it generates and is being unable to sell it due to issues with net metering
  • Rooftop solar segment need support of firm battery market and the legal enforcement of contracts because developers run the risk of the host establishment not honoring the contract when tariffs change
  • Shortfall in manufacturing capacity:As per the Ministry of New and Renewable Energy, India’s average annual solar cell manufacturing capacity is about 3 GW However, India’s average annual demand is 20 GW
  • Dues of DISCOMs:A major concern is payment delays by already debt-ridden DISCOMs As of July 2019, state DISCOMs owe Rs9,73562 crores to the renewable energy companies
  • Covid-19 Impact on Solar power sector:Solar power projects have halted due to production slowdown in China and the lockdown orders in India Further, developers have been facing delays in procurement of modules, solar cells, and other components


Reasons for India’s Solar Energy Push:

  • To ensure Energy Security as India’s energy demands are largely fulfilled by non-renewable source of energy
  • To ensure Environmental Sustainability as Solar energy is clean form of energy resource
  • There is abundance of free solar energy in almost all parts of country as India is a tropical country
  • It can help India to be self-reliant in energy sector
  • It can promote green energy in rural area which is crucial for agri-business in farms for running irrigation, green-houses, and crop and hay dryers, making agriculture risk free


India’s efforts and Government initiatives:

  • One Sun One World One Grid’ (OSOWOG) initiative proposed by India to set up a framework for facilitating global cooperationwhich aims at building a global ecosystem of interconnected renewable energy resources that can be easily shared
  • Solar mini-grids project by Ministry for New and Renewable Energy (MNRE) to take renewable energyto remote areas It also aims to promote universal energy access by 2025 and reduce electricity costs and tariffs
  • National Solar Mission, a major initiative of the Government of India and State Governments to promote ecologically sustainablegrowth while addressing India’s energy security challenge
  • The Indian Renewable Energy Development Agency (IREDA) is a Non-Banking Financial Institutionunder the administrative control of MNRE for providing term loans for renewable energy and energy efficiency projects
  • National Institute of Solar Energy, an autonomous institution under MNRE which is apex body for R&D
  • Establishment of solar parks and ultra major solar power projects and enhancing grid connectivity infrastructure


Way forward:

  • It is necessary to have better coordination among centre and states for effective implementation of integrated policies
  • India needs to enhance its solar manufacturing capacity as it cannot just rely on large scale solar deployment by importing solar equipment
  • There is an immediate necessity to develop the entire value chain ecosystem to become competitive and achieve sustainable growth in the long run
  • The government needs to provide support to solar power producers with liquidity via financial incentives
  • Investment in R&D programme, as well as human resource development is necessary Training regarding the various stages of solar cell manufacturing supply chain can be made a part of the National Skill Development Mission
  • A decentralized approach will be suited for Indian landscape and there has to be greater use of residential and commercial buildings to deploy more panels