India has set ambitious renewable energy targets, aiming to achieve 175GW capacity by 2022 and 500GW by 2030. However, progress remains below potential with under-achievement of solar and wind power targets. Challenges like financing gaps, policy uncertainty and infrastructure bottlenecks must be addressed through targeted reforms.
- As of November 2020, installed renewable capacity was around 91GW comprising 37GW of solar and 38GW of wind power, making up only 25% of the 175GW target set for 2022.
- Solar sector faces issues like safeguard duties, GST uncertainties, tariff caps and policy flip-flops that have skewed tender bidding and deterred investors. Lack of cheap financing and power evacuation infrastructure gaps too constrain scale-up.
- For wind power, key issues are lack of investments in new technologies, delays in land acquisition and power evacuation infra, difficulties in securing power purchase agreements, asymmetry in bundled vs unbundled tariffs etc.
- Offshore wind and solar farms potential remains untapped due to high costs and initial risks deterring investors. Rooftop solar similarly faces bottlenecks due to financing and ownership complexities.
For accelerated progress, concerted efforts are vital across following aspects:
- Steadier policy environment providing 5-10 year visibility to instill investor confidence. National Renewable Energy Act can institutionalize this.
- Boosting R&D and manufacturing ecosystem through PLI schemes and incentives for technology indigenization. MSME role is vital here.
- Streamlined land and environmental clearances, facilitating power evacuation infrastructure through renewable energy zones on priority transmission corridors.
- Leveraging low cost financing options through multilateral funds, sovereign guarantees and dollar denominated bonds. Fiscal incentives for rooftop solar essential.
With focused impetus on infrastructure, financing, R&D and stable policies, India’s immense renewable energy potential can be unleashed to spur a clean energy transition and energy security while meeting our climate goals.