It's nice but not sunny

It will take more than am­bi­tious tar­gets for the gov­ern­ment to in­crease In­dia's so­lar ca­pac­ity


Sin­cep­tion, the present INCE ITS Na­tional Demo­cratic Al­liance gov­ern­ment un­der Prime Min­is­ter Naren­dra Modi has stated its in­ten­tion to pro­vide 24x7 elec­tric­ity to all. “In­dia al­ready has an in­stalled ca­pac­ity of 250 GW, dom­i­nated by fos­sil fu­els; the ad­di­tional elec­tric­ity de­mand cre­ates a mas­sive op­por­tu­nity for re­new­able en­ergy re­sources,”Modi said in a press re­lease.

On Novem­ber 17, Union re­new­able en­ergy min­is­ter Piyush Goyal made an im­por­tant an­nounce­ment, “What we in­her­ited was 20 gi­gawatt (GW) up to 2022, which we are try­ing to re­set to 100 GW...we see enor­mous po­ten­tial on the so­lar front...”

Even though the gov­ern­ment sees po­ten­tial in it, the so­lar sec­tor in In­dia is cur­rently not look­ing that bright. In­vest­ments have de­clined in the past few years. In 2012, only $1.8 bil­lion (`9,676.94 crore) was in­vested in so­lar power in In­dia, which de­clined to $1 bil­lion (`5,895.27 crore) in 2013.

This is de­spite the fact that the cap­i­tal cost of so­lar pho­to­voltaic (PV ) projects has re­duced by al­most 60 per cent since Jan­uary 2010, when the Jawa­har­lal Nehru Na­tional So­lar Mission (jnnsm) was in­tro­duced.

Chan­dra Bhushan,deputy direc­tor of the Delhi-based ngo Cen­tre for Science and En­vi­ron­ment (cse), says, “The decline in in­vest­ments in re­new­able en­ergy was largely be­cause of pol­icy un­cer­tainty within the Min­istry of New and Re­new­able En­ergy (mnre). Fi­nanc­ing has been an is­sue in the coun­try, es­pe­cially for high-cost projects.”

“In­dia needs $30 bil­lion (over 1.91 lakh crore) in­vest­ment in the re­new­able sec­tor ev­ery year but re­ceived only $6 bil­lion (about

35,155.63 crore) in 2013,” Upen­dra Tri­pathi,sec­re­tary,mnre,said in Septem­ber. mnre’s poli­cies have not been able to per­suade In­dian banks to pro­vide loans for so­lar power projects. Devel­op­ment in the sec­tor has also been de­terred by high in­ter­est rates.Lo­cal banks are re­luc­tant be­cause they fear cash-crunched dis­coms will not be able to pay for the so­lar feed-in tar­iffs.“The power pur­chase agree­ments signed be­tween de­vel­op­ers and dis­coms are not bank­able be­cause there is no cer­tainty whether the pro­duced power would be bought by the dis­coms,” says Har­ish Ahuja, Pres­i­dent, Strat­egy and Cor­po­rate Af­fairs at Hin­dus­tan Power Project,one of the de­vel­op­ers of so­lar power projects.

To re­vive the in­dus­try, mnre wants the gov­ern­ment to back a loan of €1 bil­lion ( 7,953.78 crore) sought from Ger­man bank KfW to pro­mote rooftop so­lar sys­tems of 1.6 GW ca­pac­ity across the coun­try.The World Bank is al­ready col­lab­o­rat­ing with the So­lar En­ergy Cor­po­ra­tion of In­dia (seci) for fi­nanc­ing an ul­tra-mega so­lar project in Mad­hya Pradesh.Coal In­dia re­cently signed a mem­o­ran­dum of un­der­stand­ing (mou) with seci to in­stall 1 GW so­lar power plants in the so­lar parks in dif­fer­ent parts of In­dia. ntpc, the largest power pro­ducer in In­dia, has about 4 GW of so­lar power projects in var­i­ous stages of devel­op­ment across In­dia.

Is In­dia pre­pared?

In­dia needs to achieve 100 GW by 2022 as per the plans of the Modi gov­ern­ment. By Septem­ber 2014, the in­stalled ca­pac­ity of so­lar power was 2.76 GW. The ca­pac­ity needs to grow more than 12 GW ev­ery year to meet the tar­get in the next eight |years. “De­vel­op­ing at the rate of 12 GW in a year would also mean 12 times the sup­ply of mod­ules, 12 times the amount of cap­i­tal—both debt and eq­uity,12 times more hu­man power and enor­mous land man­age­ment to sup­port such growth,” says Raghu­nath Ma­ha­p­a­tra, vice pres­i­dent, strat­egy,Wel­spun En­ergy.

Such in­creases have to be planned metic­u­lously. “A 100 GW sounds like a good idea, but im­ple­men­ta­tion of this tar­get is an im­por­tant as­pect. Is the gov­ern­ment ma­chin­ery ca­pa­ble of pro­vid­ing the pol­icy

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