Indian Parliament Criticizes Solar Program

• India's Parliamentary Standing Committee on Energy has published a report titled 'National Solar Mission - An Appraisal
• It asks India's Ministry of New and Renewable Energy to become more proactive in the implementation of the country's National Solar Mission
• Land and rooftop space available with the Ministry of Defence could help set up 5 GW of solar power capacity alone
• A dedicated program to establish India as a solar manufacturing hub is needed  
• The Committee asks the government to take notice of issues raised by DISCOMs that may lead to problems in the successful implementation of solar rooftop scheme
• In view of the falling solar power tariffs, the Committee suggests to scrap the viability gap funding (VGF) mechanism

The latest record low tariffs in India have been questioned by India's Parliamentary Standing Committee on Energy as the developers of such projects may find it difficult to raise funds and compromise on the quality of materials used.

This is just one of the many observations of a new report titled 'National Solar Mission – An Appraisal'. The Standing Committee on Energy in India has presented this solar program appraisal in the Parliament. Recently, the Committee was reported to have asked the government to reconsider its unrealistic 40 GW target for rooftop solar installations (see Govt Panel Finds Rooftop Target Unrealistic).

Some of the major observations of the Committee are:

• Despite the government officially allocating 357.5 MW of solar power capacity for defence entities in January 2015, only 7 MW has been commissioned so far. The Committee noted that the land and rooftop space available with the Ministry of Defence is sufficient to set up 5,000 MW of grid connected solar PV power projects. It suggests that this entire capacity is tendered and locally produced solar cells and modules may be used.    
• Ministry of New and Renewable Energy (MNRE) has not set any financial targets for achieving the 100 GW solar power capacity target by 2022. Most of the estimated investment comes from private entities. The Committee believes MNRE needs to be more proactive and not act like a 'bystander'. It could provide access to loans at more favorable interest rates, introduce green bonds through the Solar Energy Corporation of India (SECI), and the like.
• China holds more than 80% market share in India, exporting its solar power equipment to the country. Indian solar products manufacturers are unable to compete with Chinese firms. The Committee strongly believes that over-reliance on a single country is not good for the Indian solar sector. It recommends formulating a dedicated program to establish India as a solar manufacturing hub.   
• Out of the 34 solar parks of 20,000 MW capacity approved in 21 states, land has been identified for 33 solar parks. Only 1,516 MW of capacity has been commissioned in these solar parks so far, which gives the impression that the infrastructure for these parks is developed parallel to the construction of the solar power projects. This is 'not going to help project developers'. The Committee recommends time bound development of solar parks and MNRE to conduct regular review meetings with state governments and solar park developers.
• The viability gap funding (VGF) scheme is obsolete, argues the committee report. With solar power tariffs below 4.50 INR per kWh, which is the benchmark tariff set for VGF projects executed by SECI, it recommends doing away with this scheme.
• Pointing at the 'disappointing' performance of government organizations in commissioning only 1,037.26 MW, the committee recommends MNRE to take corrective steps for timely implementation.
• Calling concerns raised by electricity distribution companies (DISCOMS) against net metering of 'sustainable nature' that will 'certainly erode economic capacity of the DISCOMs', the Committee asks the government to find some solution to this problem if it wants success of solar rooftop systems.
• It recommends setting up 'single window systems' for the approval process and do away with the involvement of various ministries as it is leading to delay in signing PPAs, thereby delaying project implementation.
• Training programs and specialized courses ought to be introduced in research institutes in the country to ensure technically qualified manpower of high caliber.

The report send a very clear message. "The success of the mission solely and squarely hinges on the success of solar energy programmes. Any unfulfilling result of our efforts on this count will have a cascading effect. If we are determined for the success of the renewable energy mission, then there can be no letup in our consistent efforts, close monitoring and keen interest in attainment of the Solar Energy targets," emphasize the authors of the report.

Extra capacity for home-made cells and modules?

The report mentions that the MNRE is seeking approval for a central public sector undertaking (CPSU) scheme of 7,500 MW wherein the entire capacity will be set up through domestically manufactured solar PV cells and modules.

"This may be the answer to avoid a disruptive anti-dumping tariff imposition by providing a market for domestic manufacturers – if this proposal can get approved. However, it needs to be done in a way that does not violate the WTO ruling and the CPSUs will have to actually auction and procure solar through DCR, even though these projects will be expensive compared to Non-DCR projects," said Raj Prabhu CEO of Mercom Capital Group.

The report can be viewed on the website of Lok Sabha (House of the People, Indian Parliament).