India’s solar capacity addition has slowed down

Note4students

Mains Paper 2: Governance | Government policies & interventions for development in various sectors & issues arising out of their design & implementation.

From UPSC perspective, the following things are important:

Prelims level: Not much

Mains level: Renewable energy policies in India and issues related to them


News

  • A new report by global analytics firm CRISL, says that India could fall short by about 40 per cent from its stated goal.

India’s lag

  • India, which crossed 25 GW of installed capacity at the end of December 2018, may only be able to add another 44 to 46 GW in the next five years.
  • India may not be able to meet its 2022 commitments of installing 100 gigawatts (GW) of solar power.

Why?

  • One of the reasons is an anti-dumping measure imposed in July 2018 called the safeguard tax on imported solar cells, which are widely used in India.
  • This tax was 25 per cent for the first year, 20 per cent for the next six months and 15 per cent for the following six months.
  • This was done as a safeguard measure for the domestic solar module industry, which is unable to sell panels due lower priced imports from China and Malaysia.
  • Coupled with this there was lack of clarity on GST for the solar sector for over a year.

Declining Tariffs

  • The impact of the duty increased the cost of installation by 10-15 per cent, even though module prices fell from $0.30 per watt-peak in March 2018 to $0.24 per watt-peak in December 2018.
  • In 2017 the lowest bid tariff was Rs 2.44 per unit, which could not be reached in 2018.
  • All this meant that capacity addition in 2018 was much below the achievements of 2017. In 2017-18, 9,000 megawatts (MW) of solar capacity was added, which slowed down to less than 7,000 MW in 2018-2019.
  • The report says that installation rate will climb up in the coming years as the safeguard duties are brought down incrementally.
Solar Energy – JNNSM, Solar Cities, Solar Pumps, etc.
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