After three years of announcement of the 100 gigawatt (GW) solar capacity target for March 2022, discuss the progress made so far while highlighting the issues and challenges.
Published: September 27, 2017
Clean energy has been the central pillar of India’s energy policy. Working in this direction Center government under National Solar Mission, enhanced the target by five times from 20,000 MW to 100 GW by 2022. There has been good growth in annual capacity addition.
However, there are certain issues which the sector is facing:
- Patchy growth
- The solar sector grew only in certain patches, for example, Karnataka, Andhra Pradesh, Telangana and Tamil Nadu account for 56% of total capacity, while the combined power consumption of these states is only around 25% of national consumption.
- Another issue is that the demand for solar power is declining specifically when tariffs are going down.
- Aggressive bidding
- Because of aggressive bidding and irrational pricing, many projects are either being abandoned or financially distressed. Discoms, which procured solar at higher prices are looking to renegotiate or cancel allocated projects. This poor planning and policy uncertainty is a big challenge in front of the sector as private investors, specifically foreign investors, need policy certainty.
- Incentives from government
- Apart from that the incentives from government side are being gradually reducing.
Apart from the mentioned issue solar sector is also facing certain challenges.
- Intermittent supply and storage
- The challenge is that how variable, intermittent power can be integrated into the grid. With development in the storage technology, the problem of variability can be resolved.
- Solar components
- Even after domestic content requirements and Make in India Campaign domestic modules account for less than 10% of consumption, remaining are imported. The issue is that there is huge dependency on component imports. The challenge in front of policymakers is that whether India cheap power or economic growth and jobs.
The need of the hour is right policy environment keeping future perspective in mind. With proper support, solar can address various issues related to energy sector. The solar sector has the potential to transform economy and environment.
Model Questions Category: 076 - Infrastructure Energy Sector