Most Important Obstacles to India’s Solar Energy Targets


According to the Ministry of New and Renewable Energy (MNRE), India imported $ 2.5 billion worth of solar wafers, cells, modules and inverters in 2019-2020.

By Manjesh Nayak

Under the Paris Agreement, India has committed to producing 40% of its installed energy capacity from non-fossil sources by 2030. India’s 2022 energy target renewable (RE) is 175 GW, including 100 GW of solar energy. Recently, India also set itself an ambitious target to install 450 GW of renewable energy by 2030. According to the Optimum Energy Mix report from the Central Electricity Authority, the country’s electricity demand is estimated at 817 GW. in 2029-30, including 450 GW from renewable energy sources. of which solar would provide 280 GW or more than 60%. To achieve this solar energy target, an average of 25 GW must be installed each year. We need to build sufficient manufacturing capacity in our country to be ready on the supply side. Currently, the annual national manufacturing capacity of solar inverters is 5 GW, while for solar cells and modules it is 3 GW and 10-15 GW respectively. We need to increase our manufacturing capabilities with the goal of renewable energies in mind.

India’s solar business is now largely dependent on imports of solar equipment. According to the Ministry of New and Renewable Energy (MNRE), India imported $ 2.5 billion worth of solar wafers, cells, modules and inverters in 2019-2020. However, disruptions in international trade caused by COVID-19, especially on imports of solar modules and solar cells, have hampered the expansion of India’s solar capacity. To meet its renewable energy aspirations and meet its growing electricity needs, we need to change our dependence on imports and boost domestic production through policy measures.

Here are the main obstacles to achieving India’s solar energy targets:

  • The country lacks manufacturing of polysilicon, ingots and wafers, which are crucial phases in the solar photovoltaic (PV) manufacturing chain and are both capital and energy intensive. In addition, inadequate integrated installation, the latest technologies and economies of scale, high land and electricity cost, limited capacity utilization, high financial costs and a shortage of skilled labor lead to increased manufacturing costs.
  • The main challenge hindering the achievement of the solar target in India is political uncertainty. Discoms in many places discourage net metering and power banks because they fear losing their high paying customers. Current solar legislation differs by state, and the process of purchasing electricity between states is inefficient, creating a barrier for consumers. Policy changes create confusion among all parties and create unnecessary delays. To meet such challenges, a pro-consumer, lean and coherent solar strategy is needed, a strategy that promotes investment while minimizing the complexity of laws.
  • When looking at the financing situation in India, loans for fossil fuel vehicles are easily and quickly available, while obtaining a loan for a solar project is difficult even when the technology is noticeably more efficient, reliable and sustainable. long-term.
  • Compared to other countries, solar tariffs in India are extremely low, which makes them unsustainable for developers and could potentially compromise the quality of the solar system. As a result, companies have to deal with viability issues in terms of profits and pricing.
  • There is a shortage of qualified engineering, procurement and construction (EPC) personnel. The training and development of young people is essential to meet the demands of an ever-growing renewable energy industry.

Overcome obstacles:

For starters, it is important to build a strong network infrastructure. This could be accomplished through financial incentives and technological advancements. Promotion and support of solar cells, modules and other equipment manufacturing units, modernization of distribution networks, incentives for R&D efforts and other infrastructure-related measures should also be considered.

In addition to this, international and domestic investors invest their money in large-scale RE projects. For these reasons, it is crucial to grant tax exemptions and other benefits to investors in renewable energy. These large-scale renewable energy projects have seen the lowest prices and are essential to our energy transformation. With strong financial measures such as green bonds, clean energy funds and institutional loans, India’s solar energy sector will invest wisely in efficient and scalable solar energy. Technology.

Another relevant point is that the huge subsidies currently given to fossil fuels should be transferred to renewables. In 2019, the RE subsidy represented only 12% of the subsidies given to coal and oil.

In addition, there is also a need to train and develop young people in order to meet the demands of a thriving renewable energy industry. A key role would be played by expanding the MNRE Surya Mitra training program and delivering certification through incorporated institutions.

In conclusion, for more organic growth of the renewable energy sector, the renewable energy targets should be implemented by state governments. This would be more widely accepted and it would be easier to deal with local and political issues. India, being a tropical nation, solar power is the easiest to harness among the renewable energy sources. Thus, the solar sector will become an essential and unavoidable component of the Indian economy in the near future and will meet our energy needs.

(The author is Chief Financial Officer, Oorjan Cleantech Private Limited. Opinions expressed are personal and not necessarily those of Financial Express Online)

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