Intersolar Day 2 – Subsidies for off-grid solar will be gradually phased out – MNRE

“Solar Eclipse” seems to be over. At least that is what I felt after interacting with several industry colleagues. More on that in a while.
The day 2 of Intersolar India 2014 saw presentations on various topics like PV project development, off-grid solar, Solar PV-Diesel hybrid systems, energy storage and project financing. There was also a session on Research and Education at the National Centre for Excellence in Photovoltaics(NCPRE) organized by IIT Bombay.
(Some highlights of Day 1 is available here). 
Mr. Tarun Kapoor, Joint Secretary, Ministry of New and Renewable Energy(MNRE) was at the event, and interacted with the media. During his interaction, he touched upon a range of topics including the JNNSM Phase 2 project allocation, subsidies for off-grid systems, and mentioned that the roadmap for achieving 100 GW of capacity by 2022 is being worked upon. The plans will be released very soon. On subsidies, Mr. Kapoor mentioned that the subsidies will be made available, but will gradually be phased out. He highlighted the case of discontinuation of subsidies for Solar Water Heaters as a precedent (more here). He said that rooftop solar power is already attractive in the commercial and industrial segments even without subsidies. There will be subsidy support for the residential segment for some more time. He also said that proposals to introduce income tax incentives for residential consumers of solar power has been put up with the Finance Ministry, and it is for the Finance Ministry to decide on the proposal.
Mr. Sudhi Ranjan Mohanty, Chief Secretary for the Renewable Energy Department, Government of Madhya Pradesh was also present at the event, and he highlighted how Madhya Pradesh has become one of the leaders in the solar sector within a short span of time. He also pointed out the advantages of setting up solar projects in Madhya Pradesh. The state announced its plans to set up its first solar UMPP of capacity 750 MW. The project will be allotted through a bidding process, and the minimum bid size would be 250 MW(read here).
The Day 2 of the exhibition saw relatively large number of visitors, and the reported footfalls at the exhibitor booths were considerably higher than the last edition of the event. A few of the exhibitors I spoke to mentioned that most of the visitors were system integrators who had ventured into the solar rooftop and off-grid PV space. Some of the PV Manufacturers were of the opinion that the worst is behind us, and the lengthening project line will ensure that there are business opportunities for everyone(developers, EPCs, manufacturers, etc) and will bring down tensions within the ecosystem. According to a few PV manufacturing equipment vendors, cell manufacturing capacity of some of the cell manufacturers is getting expanded.
The bottomline is that there is guarded optimism, and all indications point to 2015 becoming a blockbuster year, with a capacity addition of upto 2.5 GW. As mentioned in the beginning of this article, the “solar eclipse” seems to be finally over.
(The event will conclude on the Day 3 on 20th November, 2014, which will see experts speak on topics like Balance of Systems(BoS), Operation & Maintenance(O&M) of solar projects, large scale PV projects, and Distributed Generation, among others.) _______________________________________________________________________________________________

Subscribe to RESolve Energy Consultants : Perspectives and Insights by Email


5 thoughts on “Intersolar Day 2 – Subsidies for off-grid solar will be gradually phased out – MNRE”

  1. 100 GW as a buzz word is nice and it creates just that – a buzz. But will it result in implementation on the ground? People are being quoted as mentioning that even if half of it is done, it will be great. But is such a target realistic?
    And are we creating an ecosystem to support that target? What about availability of land suitable for large solar projects – land that is connected by road and is close to an evacuation point? What about transmission infrastructure to wheel that power to the demand centers? What about storage solutions to make sure the power is available when the sun is not? What about financing needs for these projects – not only project finance but finance for manufacturing the components as well?
    And finally, how to ensure that the euphoria doesn’t result into unfinance-able projects bid at absurdly low tariffs or prices?
    India seems to be swinging from one extreme to another as far as solar is concerned. We need to focus on a balanced mix of renewable technologies such as wind, solar, small hydro, biomass coupled with non-renewable essential evils such as coal, gas and nuclear. This has to be supplemented by investments in transmission & distribution too. Projects have to be made bankable and attractive for investors. Without this, such targets are more likely to be left miserably underachieved.

    1. Thanks Nikhil for your views. Most of the people I spoke to were voicing concerns similar to what you had mentioned. The CEO panel basically said that this target can be achieved only if the addition of evacuation infrastructure keeps pace with the power generation capacity addition, and easier financing is facilitated.
      The mood is different, more because of the 1500 MW of projects alloted in the 3 states, and the 750 MW earlier this year under JNNSM. At least the 2015 is predictable now.

  2. And secondly, regarding the subsidy for roof top solar, it needs to continue for some more time. I think it was a good move to scrap the subsidy for solar water heating. The technology has matured and has proven to be a viable investment for domestic as well as commercial users on a stand alone basis. So well done on that.
    For roof top solar PV, the same can’t be said as of now, especially for domestic users. Domestic users would require the subsidy to gravitate towards roof top solar. It will be great if you could shed some light on the process of getting the subsidy and pitfalls/ road blocks/ delay, if any, in the entire process.

  3. With such gigantic growth plans of solar power , it is imperative to initiate robust domestic manufacturing of PV modules in India. In solar PV >50% of investment goes in to modules and if that remain imported then it is no different situation than crude oil import to a large extent.
    As there was a talk sometime back that PSUs like NTPC,BHEL in some private partnership will set up hi tech , GW scale manufacturing in India. ,, i feel it needs to be pushed on high priority while dreaming of 100-GW kind of capacity addition.
    Similar to China , govt support is a must to have domestic manufacturing of good quality and quantity to implement such plans in best national interest.

Comments are closed.