- Need to provide necessary support to convert industrial units to rooftop solar energy
When the target was set seven years ago to increase the installed capacity of solar power in the country to 100 gigawatts by 2022, 50 gigawatts of rooftop solar was included in it. The remaining capacity was to be covered in solar projects at ground level. The speed that is being seen in ground level projects or in capacity addition is not seen in increasing the capacity of the rooftop. According to figures available on the Ministry of New and Renewable Energy's website, by the end of March 2021, the country had only 2.50 gigawatts of rooftop solar out of a installed capacity of 50 gigawatts of solar energy. Given the slowdown in production capacity, it is doubtful that the target of 203 will be achieved. In the financial year 2020-21, 2.50 gigawatts of capacity was added to the land, while the addition of rooftop solar was only 1.50 gigawatts. According to the data, the commercial and industrial segments accounted for 9 per cent of the total installed capacity of the rooftop, while the rest was built in residential buildings and public places.
The first discussion on the need for solar power in India was conducted during the third five-year period from 191 to 19, but no significant progress was made during that period and the subsequent two five-year, i.e. the fourth and fifth five-year plans. It started making some progress with the Sixth Five Year Plan and the need for solar power has been taken seriously in the last few years.
Solar and wind energy are the two main components of renewable energy, which are providing more impetus to solar power generation, but there is a lack of enthusiasm in increasing rooftop solar installations in solar energy. It is understandable that last year's rooftop capacity expansion was slow due to policy changes, high financial costs and the impact of the Corona, but the previous pace is not commendable. There is no incentive for rooftops in the package recently announced by the central government to provide relief to the power sector.
When the government announced its renewable energy target in 2013, it saw a surge in investor enthusiasm, but it has since waned. Many companies started adopting solar energy but the indifference of the state power distribution companies (DISCOMs) in government policies has been a major challenge for these companies. As industrial users are big customers of Discomms, the use of rooftop solar by these users increases. Discoms do not like it. Industrial units are not allowed rooftop system beyond certain limits. In addition to making the country's rooftop solar revolution a success, Discoms 'positive approach could play a key role in improving Discoms' own financial position.
Solar energy generated by erecting structures on land is diverted to the grid, while solar energy generated by installing solar equipment on the roofs of residential and industrial units is mostly used for self-use. Government buildings, residential societies and industrial units are being urged to switch to rooftop solar power as part of efforts to curb air pollution, but the pace of adoption has been slow. Various regulatory approvals pose a major challenge to accepting rooftop solar power.
When it comes to overall renewable energy, the reduction in its rates is also becoming a major challenge to renewable energy. Many approved solar projects are facing hurdles in the implementation process which is making it difficult to complete the projects or continue the completed projects. Uncertainty in the renewable power sector has made it no longer an attractive area for foreign direct investment. Banks are also reluctant to lend money to the sector in view of weakening balance sheets of power companies.
There has also been a recent increase in non-compliance by states after winning bids for solar power. India's reputation among global investors will not be tarnished by the tendency of non-compliance with the agreement following the interest shown by foreign investors. In the last two years, renewable energy tariffs have fallen sharply to less than Rs 2 per unit. Thus lower tariff rates are tempting discoms not to comply with previous agreements. In the recent past, Andhra Pradesh, Gujarat and Uttar Pradesh have seen a retreat after winning bids for solar power. It is important to maintain consistency in renewable energy policies to encourage investors in the solar and wind energy sectors.
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