Hits and misses: India’s solar power energy targets
GS Paper 2,3; Govt Policies and Interventions, Conservation, Infrastructure, Environment, Growth and Development.
Context:
A report, jointly prepared by two energy-research firms — JMK Research and Analytics and the Institute for Energy Economics and Financial Analysis — says India will likely miss its 2022 target of installing 100 gigawatts (GW) of solar power capacity. This is because of rooftop solar lagging behind.
About The Jawaharlal Nehru National Solar Mission:
The Jawaharlal Nehru National Solar Mission (JNNSM), or the National Solar Mission, is an initiative of the Government of India and State Governments to promote solar power in India.
Inaugurated in January 2010, the JNNSM has been revised twice and now boasts a target of 100 GW of solar PV by 2022.
The objective of JNNSM is to establish India as a global leader in solar energy by creating the policy conditions for its deployment across the country.
Each Phase is supported by differing key policies and targets:
- Phase I (2010 – 2013): Target for grid-connected PV (including rooftop) target: 1 000 MW Target for off-grid solar PV applications: 200 MW
- Phase II (2014 – 2017): Cumulative target for grid-connected solar PV (including rooftop): 4 000 – 10 000 MW Target for off-grid solar PV applications: 1 000 MW Scheme for at least 25 solar parks (34 approved currently under Government) and the Ultra Mega Solar Power Projects to target 40 GW solar PV13th Plan
- Phase III (2017 – 2022): Cumulative target for grid-connected solar PV (including rooftop): 100 000 MW• Target for off-grid solar PV applications (as share of cumulative): 2 000 MW. Policies and targets related to the 13th Plan are subject to an evaluation of progress and review of capacity and targets based on emerging cost and technology trends on a regular basis.
The Capacity Utilization Factor (CUF) of solar power projects is less than thermal, hydro, nuclear, wind and bio-mass power projects. The Government has launched several schemes for promotion and development of renewable energy including solar energy in the country from time to time. The Government is promoting development of solar energy in the country by providing various fiscal and promotional incentives such as accelerated depreciation, waiver of Inter State Transmission System (ISTS) charges and losses, financing solar rooftop systems as part of home loan, and permitting Foreign Direct Investment up to 100 per cent under the automatic route.
Moreover, the target set for installed solar energy capacity is 100 GW by March 2023 — 40 GW rooftop solar and 60 GW ground-mounted utility scale. The country has managed to install only 43.94 GW till July 31, 2021, the CEA data suggests.
But 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, according to a report by JMK Research and the Institute for Energy Economics and Financial Analysis (IEEFA).
The rooftop solar installation has been particularly dismal at 7GW till December 2020, according to Bridge to India, a renewable energy consultancy.
India has to quadruple its monthly installation rate to achieve its target within the stipulated time.
Factors impeding rooftop solar installation include:
- 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 the unpredictability of future open access charges.
The anticipated 27GW shortfall from the 2022 solar target can be attributed to a string of challenges which are slowing overall progress on renewable energy targets.
To get back on track, the report proposes “short and long-term measures.
These include uniform policies to apply nationally for at least the next five years, consistent regulations for net metering and banking facilities, which should apply nationally, strictly enforcing renewable purchase obligations (RPO) of companies. It is also likely that the government, in the short-term, will push aggressively for expediting solar capacity addition to achieve the 100GW target by 2022.
India’s Reiteration on the Policy through its efforts:
- Import Duty:(1st, April 2022) The Indian government has been taking several measures to promote local manufacturing under its ‘Make in India’ mission and one of those moves is imposing a 40% duty on the import of solar modules. This will promote domestic manufacturing.
- PLI Scheme: With an aim to boost India’s manufacturing capabilities and exports, the Production Linked Incentive (PLI) Scheme has been introduced. Under the provisions of this scheme, manufacturers receive support for setting up of integrated manufacturing units of high-efficiency solar PV modules and their sales.
- BIS Certification: With solar products mandated to have BIS certification, the benchmarking for domestic manufacturer will help establish higher quality parameters which will also benefit the customers.
- ALMM: The MNRE has also introduced the Approved List of Models and Manufacturers (ALMM) of solar PV cells and modules with the objective of ensuring the reliability of the Solar PV manufacturers and protecting the interest of the customers.
- The above actions will help India emerge as a leading global supplier of solar products, along with meeting country’s domestic requirements.
Challenges faced:
- Despite a significant push from the government, rooftop solar installation in India has not attained desired momentum India, especially due to the absence of lucrative ROI as solar prices are seeing north. Two major impediments are:
- The overall cost of ownership: With cost and GST getting increased by 25% and 7% respectively in last one year, there is dampness in residential rooftop segment, and the cumulative installations stand less than 5GW till now.
- Underdeveloped DISCOM Ecosystem: Current DISCOM ecosystem in India is built around thermal and by shifting to the solar there is a fear of cost competitiveness dovetailed with T&D losses leading to impact on profit margins.
- Therefore, traditional net metering system in solar installations wasn’t seen as a welcome move, however, the concept of ‘gross metering is being supported DISCOMs.
Way Forward:
- With solar panels and solar systems getting more efficient vs their earlier generation, customers are wanting to invest in a technology that is getting them better output per square meter of the space they have. So, there is a constant need to invest in research & development of more efficient solar ecosystem involving energy storage systems.
- Despite all the challenges, Energy Storage trends will gain popularity in India alike countries such as USA, Australia etc. The trend of consuming stored solar energy in lithium battery during the day time and night time is gradually getting popular in India, therefore solutions like deeply integrated solar batteries like CAML battery will become the power holding ground for such customers.
- As India is making strides to fulfil its solar dream, Loom Solar and its smart methodologies shall continue to provide the Indian solar industry with much-needed assistance for ‘Mission 2030’.
