India’s Solar Sector

For Prelims: Schemes and programmes for Achieving Renewable Energy Target.

For Mains: India's achievements in renewable energy sector, India's renewables energy targets,
challenges and initiatives taken to achieve it.

Why in News?

The centre is set to come up with rules to pool solar tariffs and is also aiming to increase bundling of
renewable energy in existing thermal Power Purchase Agreements (PPAs) to boost the
procurement of renewable energy.

The government is aiming to boost installed renewable energy capacity to 500 GW

What is the Issue?

Solar tariffs have fallen consistently over the past decade to a low of under Rs 2 per unit (1
unit = 1 kWh) in December 2020 due to the falling price of solar panels and lower financing
cost.
The trend of lower solar tariffs has led to many many players waiting on tariffs to fall
further instead of entering into long term power procurement agreements.

How can this Step be Helpful?

A move to pool tariffs could help speed up procurement of solar power by addressing
concerns among discoms of losing out on lower solar tariffs in the future.
The government is planning to pool all solar power procurement in a given period and ask
that all buyers pay an average of all the tariffs that are contracted in a pooling period.
The government’s step to bundle about 10,000 MW of Renewable energy based power with
fossil fuel based power over the next 4-5 year would also help lower total cost of power
procurement for certain discoms.
There are a number of old thermal power projects that are unviable because of high
variable costs and don’t get dispatched in merit order and that discoms are forced to
pay fixed costs due to requirements under existing PPAs.
The centre had in November 2021 issued guidelines which permitted thermal
generation companies to supply power to customers from their renewable energy
projects under the existing Power Purchase Agreements (PPAs) for coal-based
electricity with gains from the bundling of renewable energy to be shared between
generators and (discoms) on a 50:50 basis.
What is the Current state of India’s Solar Sector?

About:
The country’s installed Renewable Energy (RE) capacity stands at 150.54 GW (solar:
48.55 GW, wind: 40.03 GW, Small hydro Power: 4.83, Bio-power: 10.62, Large Hydro: 46.51
GW) as on 30th Nov. 2021 while its nuclear energy based installed electricity capacity
stands at 6.78 GW.
India has the 4th largest wind power capacity in the world.
This brings the total non-fossil based installed energy capacity to 157.32 GW which
is 40.1% of the total installed electricity capacity of 392.01 GW.
Push to RE in the Budget 2022-23:
About:
To facilitate domestic manufacturing for the ambitious goal of 280 GW of
installed solar capacity by 2030, an additional allocation of 19,500 crore for
Production Linked Incentive for manufacture of high efficiency modules will
be made.
Issues:
Budget estimate for the Union Ministry of New and Renewable Energy
(MNRE) for 2022-23 showed that the investment in Solar Energy Corporation
of India (SECI) has been nearly halved — to less than Rs 1,000 crores from over
Rs 1,800 crore.
SECI is the only Public Sector Undertaking of the Union government
working on solar energy and is currently responsible for the
development of the entire renewable energy sector.
A primary issue with the manufacturing of solar PhotoVoltaic (PV) modules
in India over the years has been a lack of quality.
This could have been addressed by enhancing research and
development related to technological aspects of fully integrated
manufacturing units from polysilicon to solar PV modules.
However, any separate allocation for such R&D has not been
announced.
Related Initiatives:
Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM)
International Solar Alliance
One Sun, One World, One Grid (OSOWOG)
National Solar Mission
National Offshore Wind Energy Policy
Roof Top Solar programme Phase-II
National Wind-Solar Hybrid Policy 2018
Hydrogen Based Fuel Cells Vehicles

Way Forward

Identification of Areas: Renewable resources specially wind cannot be set up everywhere, they
require specific location.
Identification of these specific locations, integrating them with the main grid and
distribution of powers, a combination of these three is what will take India forward.
Exploration: More storage solutions need to be explored.
Agriculture Subsidy: Agricultural subsidy should be rectified in order to ensure that only the
required amount of energy is consumed.
Hydrogen Fuel Cell Based Vehicles and Electric Vehicles: These are the most suitable options
when it comes to shifting towards renewable sources of energy, that’s where we need to work
upon.

Source: IE
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