Solar power rises in South India

Modern India faces multiple challenges; the most important one among them is providing energy security to all citizens, more specifically through clean energy sources. Prime Minister Narendra Modi’s vision for modern India is heavily influenced by age old practices of optimizing natural and renewable sources, meeting needs of the current generation while protecting interest of the mother earth and the future generation. Such a noble vision is central to growth of the Nation and states, with shared responsibility and sense of caring for the environment.

With global attention on climate change and emission reduction, Modi intends to make India as one of the economic superpowers driven by renewable energy. While the leading developed countries thought about meeting their energy requirements through renewables, Modi thought of solarization of the globe with International Solar Alliance of 121solar rich countries.

Modi is walking the talk by demonstrating massive solarization movement in India. Till 2014, solarization initiatives produced less than three GW of grid connected solar power, with a target of 20 GW by 2019. There was a huge gap between planning and execution. But the new solarization movement under the visionary leadership of Modi got much needed momentum and the target revised to 100 GW by 2022.

From the current solar capacity installation of about 5.5 GW, 18-fold increment requires incredible amount of efforts and estimated investment to the tune of $100 billion, which excludes investment in transmission infrastructure. Above all, the important factor which holds the key is the synchronization between Central Government and the State Government and their agencies.

The existing law under the Electricity Act, 2003 to promote renewable energy, more importantly the solar energy seems to have limited scope, so requirement for Renewable Energy Act is the need of the hour. It is to be noted that ‘The Renewable Energy Sources Act, 2000’ and subsequent amendments (2014) have been quite rewarding for renewable growth in Germany. Therefore, for a massive scale up of solar power there is a very strong case for early enactment of the Renewable Energy Act in India.

As per the region-wise break-up of India’s grid connected solar power target by 2022, Southern region is placed in the third position with 26.53 GW behind Western region (28.41GW) and Northern region (31.12GW). Solar installations statistics indicate that only three states Rajasthan, Gujarat and Madhya Pradesh contribute 57.84 percent of total solar grid connected power in the country.

On the other hand, the Southern states like Tamil Nadu, Andhra Pradesh, Telangana State and Karnataka together contribute 23.84 percent. However, recent progressive solar policies and government support are drawing attention of investors toward the Southern states like Andhra Pradesh and Telangana. Despite Tamil Nadu being one of the first movers of solarization movement it still lags behind Rajasthan, Gujarat and Madhya Pradesh. Also, Karnataka and Kerala need serious impetus to match even the newest Telangana State.

Solar Policy document in Andhra Pradesh, 2015 intends to add solar capacity of 5GW through developing solar parks, distributed generation, promoting solar powered pumps for agriculture, and building viable ecosystem for local component manufacturing. Some of the highlights of the Andhra Pradesh’s Solar Policy include: deemed industry status to generation of solar power, exemption of electricity, deemed non-agricultural land status for solar projects, exemption of pollution clearances for solar power projects, and nodal agency to facilitate solar power project developments.

Towards the end of 2015, bidding results for solar projects of 850 MW in Andhra Pradesh (AP) under bundling scheme discovered a new level of prices at Rs. 4.63/kWh. It is very hard to believe such aggressive bidding strategies, but that’s the reality today and the trend may continue in the future too. However, sustaining market growth at this price remains the biggest challenge for the developers. .

The Solar Policy-2015 of Telangana State developed with multiple objectives of contributing to long-term energy security of the state by harnessing vast solar potential by promoting solar parks through encouraging private public investment and increasing grid and off-grid solar applications using all possible technologies along with effective energy conservation measures.

All the highlighted features of Solar Policy of Andhra Pradesh are also part of Telangana Solar Policy. In addition, a few more key features of Telangana Solar Policy include exemption from Land Ceiling Act, 100% refund of stamp duty, 100% refund of VAT/SGST for all the inputs required for solar power projects, single window clearance of solar projects, and electricity duty waiver for the new manufacturing facilities and ancillaries of the Solar Power Projects.

As a result of attractive policy measures, Telangana received overwhelming response of 101 developers submitting bids for 4,988 MW and 86 developers qualifying for financial bid against floated tender for capacity addition of 2000MW. The Group-I (500MW) and Group-II (1500MW) bidding results in August2015 were quite encouraging with average solar power tariff reaching Rs.5.73 and Rs.5.62 respectively.

The downward solar power tariff trend could be due to 60-80 percent fall in solar module prices since 2009 and well supported by Government incentive schemes and policies in India. Reserve Bank of India put renewable on priority lending list to help for the borrowers to get bank loans up to a limit of Rs 15 crore for purposes like solar based for buying and setting up power generators, street lighting systems, and remote village electrification.

Further, Clean Energy Fund boosted by doubling “Environment Cess” from Rs 200 to Rs 400/ton could be helpful to fund clean energy projects. With progressive thinking, proactive policy measures, and government support for a change the Sun is rising in the South India to make Modi’s solarization movement a grand success. (The author is the co-editor of the book ‘Energy Sustainability Through Green Energy’)