How are schemes for promoting solar power doing?

Using solar energy for electricity generation is gaining traction in India.

According to Ember’s Global Electricity Review 2024, India utilizes 113 Terawatt (TWh) of solar energy in its electricity generation. China holds the first position with 584 TWh, while the United States holds the second position with 238 TWh.

The focus on promoting renewables has led to various schemes to promote the use of solar power in India. The efforts are bearing fruit, with total solar power installed capacity increasing from 2,821.9 Megawatt (MW) in March 2014 to 82,637.8 MW by April 2024. Solar energy accounts for 18.5 per cent of installed capacity and generates 6.7 per cent of the country’s energy. In contrast, coal remains the dominant source, with a significant 49.2 per cent of installed capacity and contributing to 74.8 per cent of power generation.

• Also read: Rooftop solar scheme: India’s solar power subsidies for homes face scepticism

However, the government may not be able to achieve its target of 230 Gigawatt (GW) of solar energy by 2030, due to challenges in the implementation of the schemes. While funds are being allocated, they are not being utilised, shows data.

According to the PRS Legislative January 2024 report, the funds utilized by the central government for solar energy programs under the Ministry of New and Renewable Energy (MNRE) have decreased from 69 per cent in 2021-22 to 53 per cent in 2022-23. These programs include central government flagship initiatives such as the Rooftop Solar Program and the Pradhan Mantri Kisan Urja Suraksha Evam Utthaan Mahabhiyan (PM-KUSUM) scheme, among others.

Since its launch in 2014, the Rooftop Solar Program by MNRE aimed to achieve 40,000 MW of rooftop solar capacity in India by 2022. Due to the pandemic, the goal was not achieved, prompting an extension of the deadline to 2026. The program has shown sound growth; by November 2022, it had installed 6,657 MW of solar rooftops. Subsequently, this capacity increased to 10,406 MW, indicating a significant progression towards the program’s target.

The initial plan aimed to fully subsidize the scheme for 1-3 KW solar systems in one crore households through tie-ups with renewable energy enterprises. However, in March of this year, the government modified the scheme, reducing the coverage to only 60 per cent of the costs.

The director of Lantau Group and former Secretary of the Ministry of Power, GoI, Alok Kumar, gives two important reasons, “Firstly, the main reasons are resistance from Discoms in permitting C & I consumers to go for rooftops as there is loss of cross-subsidy. Secondly, the residential sector depends on subsidy, and there have been delays in disbursement of subsidy from MNRE.”

Vibhuti Garg, Director, South Asia, Institute for Energy Economics and Financial Analysis, said, “The shortfall primarily stems from several factors in the residential sector. Firstly, there has been a lack of uptake due to issues with the design of tariffs thereby impacting the commercial viability. The payback period is much longer for consumers, and the cost of financing is higher. Additionally, there is a lack of awareness regarding how it can benefit and savings to consumers. Availing government subsidies is also a challenge, and the availability of suitable rooftops adds to the problem. While large commercial organizations have been able to reap the benefits of it, MSMEs have struggled to do so mainly due to financial reasons.”

A person who is affiliated with a green company for solar installations added, “People from across class backgrounds apply for subsidization. However, it is uncertain whether people receive the money on time or not.”

On the other hand, the solar pump installations under the PM-KUSUM scheme, which was launched in March 2019, are progressing sluggishly. The PM-KUSUM Scheme is divided into three components. ‘Component A’ involves setting up decentralized ground-mounted solar projects up to 2 MW capacity, with an allocation of solar panels totalling 4,766 MW capacity. However, only 141 MW has been installed so far by November 2023.

• Also read: Ensuring successful transition to renewable power

The second component, ‘Component B,’ focuses on installing stand-alone agricultural solar pumps. Despite an allocation of 9.7 lakh pumps, only 28.6 per cent of them have been installed within the given time period.

The ‘Component C’ aims at installing solar panels on existing agricultural water pumps that are connected to the electricity grid. Approximately 29 lakh feeder-level solar installations have been sanctioned, along with 1.3 lakh individual-level solar pumps. Of these, only 0.2 per cent (4,594) of the total pumps have been installed.

There are disparities among states too. Out of 29 States in India, Maharashtra (26.8 per cent), Haryana (24.2 per cent), and Rajasthan (21.5 per cent) have the highest number of solar pumps installed. Around nine States, including Assam, Bihar, and Telangana, among others, had not installed any solar pumps in their States as of November 2023.

The cost of a diesel water pump ranges from ₹5,000 to ₹30,000, while the cost of a high-pressure water pump is around ₹2,000 to ₹10,000. In contrast, solar pumps can cost anywhere from ₹30,000 to ₹4 lakh. To make solar pumps more accessible to people, their cost needs to be brought in line with other types of pumps.

“Farmers are getting free power and don’t have the incentive to take loans for the capex after factoring into subsidy. Also, SERCs have given very low tariffs for procurement by Discoms benchmarking against the tariff from solar parks, which enjoy a waiver of transmission charges,” added Kumar

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