Challenges on the way of India’s solar energy growth


India’s beneficial geographical location and tropical climate has bestowed it with great solar power capacity with about 310 + days of sunshine every year. Recent developments in the renewable energy sector and cumulative installations of solar-operating machines and panels across India have created a new shift towards a growing energy market boosted by government schemes. The budget 2017-18 has allocated Rs.5473 crore to the Ministry of New and Renewable energy out of which solar power receives Rs.3361 crore. Additionally, it extends support to power 2,000 railway stations through solar energy carried out under the Indian Railways 1 GW Solar mission.

India’s dream project to generate 175 GW of renewable power by the year 2022, out of which 100 GW comprises solar projects, is an ambitious move. This proposed 100 GW equals to 60 GW of utility-scale projects, both Solar Photo Voltaic (PV) and Concentrated Solar Power (CSP) through structures like solar parks plus 40 GW of rooftop solar applications manufactured for commercial users and households, together with certain small-scale schemes and off-grid capacity building. However, there are several bottlenecks which need to be tackled efficiently.

First and foremost is the people’s distrust in acceptance of a new electricity source. This distrust is not associated with the literacy levels in the country, but the will to give up older forms of exhaustible energy sources. Citizens face the dilemma to opt for solar panels, with the fear of its failure in heavy monsoon seasons when the solar energy may be scarcely available depending on the weather conditions. Although part of it is true, solar panels show reduced capacity during heavy monsoons, but the batteries attached to the solar make up for the loss. People need to be made more informed about the functioning of solar panels through mass government drives or private awareness campaigns.

The Transmission and Distribution (T&D) losses pose another huge challenge for provision of solar power. These losses happen between transmission from the sources of supply to the points of distribution as well as during power supply to the consumers. Major states have the T & D loss rate around 15% which remains unrecoverable. To tackle this, the Smart Grid infrastructure is the best solution. In 2015, Global investments in Smart Grid Structure went up to $200 billion, major players being China, the United States and Japan etc. India’s IT resource has always been a game-changer, the integrated grid network in power industry should reflect the strong IT infrastructure within our country. As India is gearing up for renewable energy’s universal usage and the Smart Cities initiative, the National Smart Grid Mission (NSGM) launched by the government calls for States to prepare year-wise action plans to carry out initiatives like Green Energy Corridors, the UDAY reform, smart grid Vision, etc.,

On the transactional level, a major issue arises with the fact that India still prefers to import more than producing domestically. A recent study of Mercom Capital Group (a global clean energy consulting firm) showed that India’s import of solar cells and modules is 35 times more than its export. In the period from April 2016 to January 2017, India’s solar equipment import has been $ 2.17 billion with just $60.3 million of export. China was the biggest exporter of solar equipment to India with 87% of Market share in this time period. China is able to provide cheaper solar equipment due to the benefit from economies of scale that it enjoys at its manufacturing units. These cheaper modules probe the Indian government to lower the solar tariffs in successive auctions. With the manageable modules that got produced, Britain was the biggest importer for India taking $18.84 million worth of solar exports in these ten months. An important point to be noted is that India’s domestic solar equipment production is low pertaining to the absence of polysilicon which is an essential material for making solar modules; hence it is entirely dependent on imports for getting polysilicon.

In such a case where the imports and money outflow are at their peak, the ambitious solar programs launched by the Indian government to achieve it’s 2022 target stand weak. However at this point, acquiring the best international technology and infrastructure are the major pre-requisitesThe Research and Development wing of India needs to be more aggressive.

A recent bottleneck that occurred in the middle of India’s solar agenda was the World Trade Organisation (WTO) dispute in 2016. Under the Jawaharlal Nehru National Solar Mission (JNNSM), India took up the norm of Domestic Contents Restrictions (DCR) for the production of solar cells since 2010. It mandated the solar developers in India to utilize domestically produced solar modules plus cells, and the government would, in turn, buy the electricity at a fixed rate for 25 years. This was carried out with the major motive of boosting the indigenous manufacturing base and creating a solar hub in the country. However, India received a massive blow after this got struck down by the WTO following the complaint filed by the United States, as the DCR violated certain global trading rules that India signed up for. The point of dispute was that India cannot discriminate between foreign and domestic suppliers for acquiring essential parts to create solar panels. This issue now calls for a reframing of several domestic policies especially coming under the “Make in India” campaign which promoted DCR. National standards ought to be set keeping in account their compatibility with WTO rules.

On the talk of GST (Good and Service Tax), researchers speculated that if preferential tax benefits to renewable energy were not accounted while categorizing each solar component, then GST could raise the utility-scale solar tariffs to around 9-10% which would ultimately hamper the solar progress. To our relief, as for now the GST council has levied the lowest standard of 5% GST (as against the pre-conceived 18% rate) on all solar components in India which include diodes, transistors and similar semiconductor devices, photosensitive semiconductor devices including photo voltaic cells, light emitting diodes (LED) and mounted piezoelectric crystals. This leads to a minimal turmoil in the solar network of the country. Also, it does not create adversities in the financial subsidy structure to solar developers in India. Therefore, the GST does not pose, as such, a challenge for solar growth in India but the transition period from old rates to the new rates need to be efficiently handled with.

However, at the urban level an urgent need arises for policy makers to set stringent emission control measures in India, as the rising particulate matter in cities is affecting the functioning of installed solar panels. This scenario has majorly hit the National Capital Region (NCR). This ultimately is affecting the solar power generation in major cities. Experts say that high levels of pollutants have hit the solar efficiency by 17-25% annually in North India.

The challenges do not end with the issues mentioned above; but the Government’s positive steps towards revolutionizing energy consumption can create a Better sustained India and help it achieve its targets with usage of advanced technology, healthy international collaborations and qualified human resources. The state governments need to be at pace with the Government of India, and the installation and usage of solar power should spread evenly across the Indian territory from North to south, east to west and surely not missing the very crucial North-east.