The Solar Thermal Federation of India (STFI), an industry body representing the solar water heater manufacturers, on Thursday appealed to the Ministry of New and Renewable Energy to release the unpaid subsidies of around ₹ 350 crore.

“About ₹50 crore of subsidy remains unpaid for the year 2012-13 and ₹300 crore for 2013-14. Going by the market growth, the subsidy liability will grow additionally to about ₹500 crore,” said Jaideep Malaviya, secretary general of STFI.

As part of the Jawaharlal Nehru National Solar Mission launched in 2010, consumers could avail themselves of a subsidy of 30 per cent on solar water heaters. The subsidy was provided by sellers registered with the MNRE as direct channel partners under this programme. The sellers were to be reimbursed by the ministry for providing the subsidy to consumers.

Over the years, solar water heater manufacturing has risen to 10 lakh sq meters of flat plate collectors in the country as of 2013-14. However, this amount fell from 14 lakh sq meters in the previous year.

According to STFI, the fall in production was due to lack of funds with the manufacturers who have dues pending with banks and suppliers.

“Demand has been growing at a CAGR of 35 per cent so it's not that demand has come down', but the fact is we don’t have the money to produce more,” said M D Akole, Chairman of STFI.

Akole added that manufacturers of solar water heaters were small-scale industries and most of them have given personal guarantees to their bankers.

Painting a gloomy picture for the industry unless the pending dues are cleared, Malaviya said that manufacturers would have to stop production soon if the dues are not cleared.

STFI, which has been seeking an appointment with Upendra Tripathy, Secretary of MNRE, has not been able to meet the top bureaucrat in the ministry to present their demands.

Solar water heaters are costlier to install than a traditional electric water heater. However, after the initial cost of installation, the running cost of such water heaters is zero and many municipalities and districts give users rebates on property tax and electricity bills.

According to STFI, 192 municipalities in the country have made solar water heaters mandatory for houses.

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