Daily News Analysis

Solar Energy

3rd September, 2021 Economy

Context:

Indian Companies are targeting setting up of large scale solar energy production plants.

Challenges faced by solar energy sector:

  • Land scarcity: Per capita land availability is a scarce resource in India Dedication of land area for exclusive installation of solar cells might have to compete with other necessities that require land
  • Fall in prices: Due to government incentives, the price of solar power has been falling which can disincentivize the producers and affects quality of solar energy installations in India
  • Issues with Rooftop Solar:
  • Homeowners at large have not been installing solar panels at roof top This is because small deployments naturally cost more than grid-scale farms Homeowners do not generally consume all the energy it generates and is being unable to sell it due to issues with net metering
  • Rooftop solar segment need support of firm battery market and the legal enforcement of contracts because developers run the risk of the host establishment not honoring the contract when tariffs change
  • Shortfall in manufacturing capacity: As per the Ministry of New and Renewable Energy, India’s average annual solar cell manufacturing capacity is about 3 GW However, India’s average annual demand is 20 GW
  • Dues of DISCOMs: A major concern is payment delays by already debt-ridden DISCOMs As of July 2019, state DISCOMs owe Rs9,73562 crore to the renewable energy companies
  • Covid-19 Impact on Solar power sector: Solar power projects have halted due to production slowdown in China and the lockdown orders in India Further, developers have been facing delays in procurement of modules, solar cells, and other components

Reasons for India’s Solar Energy Push:

  • To ensure Energy Security as India’s energy demands are largely fulfilled by non-renewable source of energy
  • To ensure Environmental Sustainability as Solar energy is clean form of energy resource
  • There is abundance of free solar energy in almost all parts of country as India is a tropical country
  • It can help India to be self-reliant in energy sector
  • It can promote green energy in rural area which is crucial for agri-business in farms for running irrigation, green-houses, and crop and hay dryers, making agriculture risk free

India’s efforts and Government initiatives: -

  • One Sun One World One Grid’ (OSOWOG) initiative proposed by India to set up a framework for facilitating global cooperation which aims at building a global ecosystem of interconnected renewable energy resources that can be easily shared
  • Solar mini-grids project by Ministry for New and Renewable Energy (MNRE) to take renewable energy to remote areas It also aims to promote universal energy access by 2025 and reduce electricity costs and tariffs
  • National Solar Mission, a major initiative of the Government of India and State Governments to promote ecologi-cally sustainable growth while addressing India’s energy security challenge
  • The Indian Renewable Energy Development Agency (IREDA) is a Non-Banking Financial Institution under the administrative control of MNRE for providing term loans for renewable energy and energy efficiency projects
  • National Institute of Solar Energy, an autonomous institution under MNRE which is apex body for R&D
  • Establishment of solar parks and ultra major solar power projects and enhancing grid connectivity infrastructure

 Way forward:

  • It is necessary to have better coordination among centre and states for effective implementation of integrated policies
  • India needs to enhance its solar manufacturing capacity as it cannot just rely on large scale solar deployment by importing solar equipment
  • There is an immediate necessity to develop the entire value chain ecosystem to become competitive and achieve sustainable growth in the long run
  • The government needs to provide support to solar power producers with liquidity via financial incentives
  • Investment in R&D programmes, as well as human resource development is necessary Training regarding the various stages of solar cell manufacturing supply chain can be made a part of the National Skill Development Mission
  • A decentralized approach will be suited for Indian landscape and there has to be greater use of residential and commercial buildings to deploy more panels