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.