Vineet Mittal: Solar Energy’s Role in Energy Security

Indian government has set up a huge target under the Nationally Determined Contributions (NDCs) of installing 500 GW of renewable energy by 2030. If this goal is achieved, India will become one of the largest producers of green energy in the world surpassing some developed countries also. India has tremendous opportunities to meet the demand while opting carbon reduction path. The energy map of India has changed drastically over the years and especially in the last decade with incorporation of renewable energy.

India has an impressive growth in Renewable energy sector as India has already crossed 120 GW of renewable energy installations out of which 63 GW of capacity stands for solar installations. India has the fastest growth rate in renewable energy capacity additions with renewable energy capacity growing 1.97 times and solar 18 times.

According to IEA, “Energy Security is uninterrupted availability of energy sources at an affordable price.” Greater energy security will bring greater access to energy as well as better employment opportunities. India’s top most priority now is Energy Security. Energy transition will take place in India while taking care about energy security. India has supporting government policies which helps in accelerating India’s clean energy transition and achieving greater energy security.

ISA: International Solar Alliance (ISA) is a proof to India’s commitment to provide affordable and clean energy to all citizens of India. Due to proximity to the Equator, India is a lucky nation to have 300 sunny days a year which can harness 5000 trillion kWh a year.

NSM: India has launched National Solar Mission (NSM) which aims to reduce the cost of solar power generation and achieve grid tariff parity in the country 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: With the implementation of BCD and ALMM, domestic manufacturing is encouraged. Basic Customs Duty is levied on imported solar cells and modules 25% and 40% respectively. ALMM-Approved List of Models and Manufacturers provides for enlistment of eligible models and manufacturers of solar PV cells and modules complying with the BIS Standards and publishes a list. Indian government has allocated ₹19,500 crore under Production Linked Incentive (PLI) scheme to build an ecosystem for manufacturing of high efficiency solar PV modules in India and reduce imports.

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

Net Metering Incentives: Net-Metering policy’s focus is on self-consumption of electricity generation by the consumer and the surplus energy is sold to the local utility. Thus, Net metering arrangement combine captive consumption and exchange of power with the utility. If there is a net metering incentive policy in the state and if there is a net meter on the rooftop, then financial incentives for the power generated can be availed. For example, to increase adoption of rooftop solar, states have announced various subsidy schemes. Gujarat has announced 40% subsidy for residential rooftop solar from 1-3 kW and 20% subsidy on 3-10 kW.

Accelerated Depreciation: For profit making companies, by installing rooftop solar systems, maximum 40% of total investment can be claimed as depreciation in the first year.

REC: Renewable Energy Certificate (REC) is a market-based instrument to promote renewable energy and facilitate compliance of Renewable Purchase Obligations (RPO). One Renewable Energy Certificate (REC) is treated as equivalent to 1 MWh. Solar-RECs are issued to eligible entities for generation of electricity using solar as a renewable energy source. RECs can be exchanged 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. The PPAs offer high price equal to that of peak power for the solar power, which is usually secondary source and an intermittent energy source on daily basis.

Viable Gap Funding (VGF): VGF means a grant to support infrastructure projects that are economically justified from a social or national perspective but fall short of commercial financial viability. For bidding for the projects, the government sets a reference price, over and above which the companies would bid for viability gap funding (VGF) from the government. The solar power produced will be sold to the purchasing DISCOMs/ State utilities/ bulk consumers at a pre-determined tariff determined by MNRE based on the market conditions.

Energy Mix: It’s not that only solar or wind or coal will be providing the full energy for the demand and we can neglect other energy sources, but every energy source will be required in the energy mix of India. Mainly, we are concerned about the portion of the energy source and we’re trying to reduce the usage of fossil fuels.
India’s Airports Authority of India (AAI) and the entire railways network are setting up solar power plants at various airports and railway stations to meet their own electricity needs based on technical feasibility and state policies.

There is a need for increased capacity building for professionals involved in solar business, finance, technology and regulations. Combine efforts of policymakers, businesses, government officials at national-state-district-taluka levels, youth, women and NGOs to successfully achieve nation’s goal for solar energy.

Policies on innovative financing solutions (clean energy funds), incentive linked loans, green bonds, investment in R&D, 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 be able to witness great leaps in clean energy to fight against the climate change and make a sustainable future.