HOW SOLAR ENERGY CAN CHANGE INDIA’S ENERGY SECURITY LANDSCAPE?

The Indian Government has set a goal of installing 500 GW of renewable energy by 2030, as part of its Nationally Deter mined Contributions (NDCs), the nation’s climate action plan to cut emissions and adapt to climate impacts.. If successful, India will become one of the leading producers of green en ergy in the world, surpassing even some developed countries.. The energy landscape in India has undergone significant changes over the years, particularly in the last decade, with a growing emphasis on renewable energy.

India has made impressive progress in its renewable energy sector, with over 120 GW of renewable energy installations already in place. Of this, 63 GW is in the form of solar installations. The country is witnessing the fastest growth rate in renewable energy capacity, with 1.97 times increase in overall capacity and an 18-fold increase in solar capacity. According to IEA, “Energy Security is uninterrupted availability of energy sources at an affordable price.” Improving energy security is a top priority for India, as it brings greater access to energy and creates more job opportunities. The Government is committed to ensuring a smooth transition while maintaining energy security. With supportive policies in place, India is accelerating its clean energy transition and ensuring greater energy security. The International Solar Alliance (ISA): ISA, an initiative proposed and launched by India’s Prime Minister Shri Narendra Modi at the UN Climate Change Conference in Paris in 2015 demonstrates India’s commitment to provide affordable and clean energy to its citizens. The collaborative platform focuses on increased deployment of solar energy technologies among sunshine countries. Due to proximity to the Equator, the country enjoys 300 sunny days in a year, making it possible to harness 5000 trillion kWh of energy each year.

The National Solar Mission (NSM): India launched NSM with the goal of reducing the cost of solar power generation and achieving grid tariff parity through long-term policy, large-scale deployment goals, outcome-oriented R&D and domestic production of critical raw materials, components and products.

BCD, ALMM, PLI : The implementation of Basic Customs Duty (BCD) and the Approved List of Models and Manufacturers (ALMM), has led to a boost of domestic manufacturing. A 25 per cent BCD is imposed on imported solar cells and a 40 per cent BCD on imported modules. The ALMM program lists eligible models and manufacturers of solar photovoltaic cells and modules that comply with Bureau of Indian Standards, encouraging local production. The Indian Government has allocated INR19,500 crore under its Production Linked Incentive (PLI) scheme to build an ecosystem for manufacturing of high efficiency solar PV modules in India and reduce imports.

The Ministry of New and Renewable Energy (MNRE): MNRE provides centralised financial incentives for the installation of solar streetlights, solar pumps, solar power packs and other solar applications. The Ministry of Electronics & Information Technology has launched Modified Special Incentive Package Scheme (M-SIPS), which provides 20-25 per cent subsidy on capital expense for construction of manufacturing plant. Additionally, MNRE’s Human Resource Development Programmes provide financial assistance to various academic and professional organisations for providing skill development and trainings, such as Suryamitra scheme.

Net Metering Incentives: The focus of Net-Metering policy is enabling consumers to self-consume the electricity they generate and sell any surplus to the local utility . Thus, net metering arrangement combine captive consumption and exchange of power with the utility. If a state has a net metering incentive policy in place and the consumer has a net meter installed on their rooftop, they can receive financial incentives for the generated power.

For example, to increase adoption of rooftop solar, states have announced various subsidy schemes. Gujarat provides 40 per cent subsidy for residential rooftop solar from 1-3 kW and 20 per cent subsidy on 3-10 kW.

Accelerated Depreciation: For profit making companies, installing rooftop solar systems, can allow them to claim up to 40 per cent of the total investment as depreciation in the first year.

Renewable Energy Certificate (REC): REC is a market-based instrument designed to promote renewable energy and facilitate complying with the requirements of Renewable Purchase Obligations (RPO). Each REC is treated as equivalent to 1 MWh of renewable energy generation. Solar-RECs are issued to eligible entities that generate electricity using solar power. These certificates can be traded only in the Central Electricity Regulatory Commission (CERC)-approved power exchanges.

Power Purchase Agreement (PPA): The power distribution and purchase companies owned by state/central governments guarantee the purchase of solar power as and when it is produced. They offer high prices, equivalent to those of peak power, for solar power, which is typically a secondary and intermittent energy source on a daily basis, through Power Purchase Agreements (PPAs).

Viable Gap Funding (VGF): VGF is a type of grant that provides financial support to infrastructure projects that are deemed socially or nationally important but are not commercially viable. For bidding for the projects, the government sets a reference price, over and above which the companies would bid for VGF from the government.

The solar power produced will be sold to the purchasing DISCOMs/ State utilities/ bulk consumers at a pre-determined tariff set by the MNRE, based on the market conditions.

Energy Mix: It's important to understand that no single energy source, such as solar, wind, or coal, will be able to fully meet energy demand in India. Instead, a mix of different energy sources will be necessary. Our focus is on balancing the proportion of energy sources and reducing our reliance on fossil fuels.

The Airports Authority of India (AAI) and the Indian Railways are setting up solar power plants at various airports and railway stations to meet their electricity needs, based on technical feasibility and state policies. To achieve this goal, there is a need for increased capacity building in the solar industry, including professionals in solar business, finance, technology and regulations. Collaboration between policymakers, businesses, government officials at the national, state, district and taluka levels, youth, women and NGOs is necessary to successfully achieve the nation’s goal for solar energy. In addition, policies on innovative financing solutions (clean energy funds), incentive-linked loans, green bonds, investment in R&D, and effective procurement of critical minerals also need to be developed. It is the time for India to connect the dots and think on long-term visions, existing plans, implementation plans, roadmaps, cross-sector deployment of solar energy to make significant strides in clean energy, fight against climate change and create a sustainable future.