India all set to introduce cap on solar power tariffs

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Mains Paper 3: Economy | Effects of liberalization on the economy, changes in industrial policy & their effects on industrial growth

From UPSC perspective, the following things are important:

Prelims level: SECI

Mains level: India’s focus on solar & other renewable energy sources


News

Capping solar tariffs

  1. The ministry of new and renewable energy is set to cap India’s solar power tariffs at ₹ 2.5 and ₹ 2.68 per unit for developers using domestic, and imported solar cells and modules, respectively
  2. The suggestions could be a source of worry for solar power developers, given that maximum proposed solar tariffs are far lower than what was achieved through the reverse bidding process conducted by both Solar Energy Corp. of India (SECI) and state governments
  3. This decision can be seen in the light of the fact that solar power tariffs in India plunged to a record low of ₹ 2.44 per unit in July 2018

Other measures to promote domestic manufacturing

  1. On 30 July, the government ordered safeguard duty of 25% on solar panels and modules imported from China and Malaysia
  2. This was done to protect domestic manufacturers and to encourage solar project developers to buy units locally
  3. About 90% of the solar cells and modules used in India are imported from China and Malaysia & thus seeing current scenario the duty has been temporarily lifted

Why is solar power in focus?

  1. India has huge potential for harnessing solar energy
  2. India has set itself an ambitious target of achieving 100GW of solar power by 2022, with the current capacity at about 24GW
  3. India is the world’s third-largest energy consumer after the US and China
Solar Energy – JNNSM, Solar Cities, Solar Pumps, etc.
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