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Is govt’s solar capacity goal too ambitious? Here’s what the latest figures say

Samrat Sharma
Solar, Power, Energy, Capacity addition, Ministry of New and Renewable Energy, Capital Subsidy, Viability gap funding

Government has set a target of achieving 100 GW solar capacity by 2022 but have managed to reach only 29 GW till now. On top of it, the capacity addition has also come down drastically in the last two years. In 2017-18, 9.3 GW of solar capacity was added, which fell by 30% to a mere 6.5 GW in 2018-19, according to the data provided in Rajya Sabha by Raj Kumar Singh, Minister of State for New and Renewable Energy.

As of June 2019, solar energy is 8.2 per cent of the total energy produced in the country, according to the Central Electricity Authority.

How feasible is the government’s goal?

Availability of land and power evacuation are two main constraints in setting up of solar parks, said the New and Renewable Energy Minister.

“The target to achieve 100GW by 2022 does not seem realistic until the current bottlenecks in the policy at both Central and State levels are addressed. At the national level, the implementation of ‘Safeguard duty’ has not done much good to the industry and the implementation of Capex subsidies schemes are to be further improved”, said Sushil Sarawgi, Director, Kor Energy India Pvt Ltd.

He also added that the discoms are not supportive of net metering as it makes a dent in their revenue. Disallowing net metering in many states for industrial and commercial customers has made this customer-averse to go for rooftop solar. There is also a need for quality parameters standards for EPC companies, added Sarawgi.

"India's ability to achieve the 100GW target will now largely depend on how each  State government and its implementing agencies ensure ease of implementation of large scale renewable projects by streamlining land acquisition and other essential infrastructural support", said Ashish Nainan, Research Analyst, Care Ratings Ltd.

Nainan further added that the eco-system to support large-scale manufacturing of solar panels is still picking up. Thus our dependence on imported Photovoltaic cells to meet large installation targets is among the biggest limitation for the solar businesses.

The road ahead

A total of 42 solar power parks with an aggregate capacity of around 23.40 GW have been approved by the government so far to reach the goal of 100 GW target by March 2022, said the MoS for New and Renewable Energy in the house. Out of approved capacity of 23.40 GW, power purchase agreements (PPAs) have been signed for around 9.20 GW. Around 6.40 GW of solar capacity has been commissioned in various solar parks as on June 30, 2019, he further added.

The ministry also informed in a written reply that financial incentives such as Capital Subsidy, Viability gap funding (VGF), accelerated depreciation benefits, etc have been provided to support solar businesses in the country. Permitting 100% Foreign Direct Investment (FDI) under the automatic route in the renewable energy sector and the guidelines for procurement of solar and wind power through tariff-based competitive bidding process are also among the steps taken by the government towards boosting the solar business in India.