A recent report by CRISIL, a reputable rating agency, suggests that India may not achieve its target laid out in the National Solar Mission. The goal is to add a solar power capacity of 100 gigawatts (GW) by 2022. At present, the country’s capacity to generate solar power stands at 21.65 GW. The forecast predicts an additional solar capacity addition of 56-58 GW between FY19 and FY23.
Influence of Safeguard Duty on Solar Modules
A safeguard duty on solar modules from China and Malaysia has impeded solar capacity addition. Due to their competitive pricing, Chinese companies predominantly control the rapidly growing Indian market for solar components. To counterbalance, the Government imposed a safeguard duty on solar cells and modules imported from China and Malaysia starting from July 30 for two years.
Understanding Safeguard Duty
Safeguard duty or product safeguard duty refers to a tax or tariff levied by a country on the import of a specific commodity. This duty is imposed to protect local manufacturers from cheap imports that could potentially harm their business.
State Government Projects: Ambitious but Underfunded
Individual states have also set aggressive targets under their respective solar policies. However, state government projects are generally not as well-funded, and they have less access to affordable financing.
Struggle with Rooftop Solar Segment
The rooftop segment of India’s solar mission, which aims to implement a 40 GW capacity by 2022, poses a significant challenge. This scheme entails using rooftops of commercial and industrial units to generate power and consequently reduce dependence on the grid. However, given the higher cost of rooftop solar power, it is estimated to contribute no more than 8 GW by 2023.
Jawaharlal Nehru National Solar Mission (JNNSM)
The JNNSM, launched in 2009, initially aimed for Grid Connected Solar Projects of 20,000 MW by 2022. The solar sector observed rapid development, with the installed solar capacity skyrocketing from 18 MW to approximately 3800 MW during 2010 – 15. In 2015, the Government of India approved a fivefold increase in India’s solar power capacity target, amounting to 1,00,000 MW by 2022.
Underutilization of Rooftop Solar
Despite the government’s goal for 40 GW of solar power generated through rooftop solar installations by 2022, the country is behind on this target. Factors dissuading the widespread adoption of rooftop solar include variability in supply, unsupportive electricity tariff structure, inadequate and expensive storage technology, and restrictions associated with roof use.
The Promise of Rooftop Solar
Rooftop solar installations present an alternative source of electricity for commercial and residential establishments, reducing the dependency on fossil-fuel-based electricity. These systems can also provide electricity to remote locations not yet connected to the grid. However, the current challenges impede their utility and widespread adoption.
Challenges of Rooftop Solar
Rooftop solar comes with some significant challenges. The efficiency of solar panels varies daily based on sunlight exposure and they produce no electricity at night. Additionally, the subsidised tariffs charged to residential customers undermine the economic viability of installing rooftop solar panels. With the potential profit not outweighing the costs, and storage solutions being costly, the adoption of rooftop solar has remained limited.