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India’s solar power is in decline

WHen Olav Schulz India’s green energy goals will be at the top of the agenda when he meets Narendra Modi in Delhi this weekend.In Berlin last May, the German chancellor pledged 10 billion euros to help India achieve its goal of generating 500gross weight Electricity from non-fossil fuel sources by 2030. The Indian prime minister will make some impressive strides to please Mr Scholz. Renewable resources now account for 121gross weight Indian 411gross weight of generating capacity from 113gross weight When the two met in Berlin.

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However, there are major stains on this progress.A total of 63 installed in India by the end of 2022gross weight of solar power generation capacity. That represents 14gross weight Year-on-year growth, but well below the government’s 100gross weight Target. Given the importance of solar energy to India’s ambitions, this is an ominous sign.India’s top 500gross weight 2030 target, 280gross weight It is expected to come from solar energy.

Much of the shortage is in roof-mounted panels, which the government expects will account for 40% of total solar power generation. Even as overall capacity growth accelerated, rooftop installations slowed. Exactly 8gross weight Solar power in India is small-scale and mostly on top of offices and factories, which pay more for grid electricity compared to homes.

Three factors prevent Indians from installing solar panels on their homes. The first is that most Indian cities, whose residents most likely have the necessary cash and technical know-how, already have reliable grids and many needs for rooftop space. Urban rooftops are often crowded with satellite dishes, water tanks and other paraphernalia, or used as social spaces. Or the landlord might build extra rooms on top.

A bigger hurdle is the lack of proper financing for small renewable energy facilities. a 5kW A solar installation sufficient to power most homes costs at least 250,000 rupees, or about $3,000. However, in Mumbai, where the cost of living is high, the average household electricity bill rarely exceeds Rs 5,000 per month. Without attractive financing, Indian households do not have enough incentive to go green. Energy companies also don’t have much incentive to promote rooftop solar. It works on a “net metering” basis, where the value of the electricity the rooftop unit supplies to the grid is deducted from the household bill. Since the households most likely to have panels installed are those paying the highest bills, utilities often view the arrangement as a net loss.

Central and state governments are experimenting with ways to realign the incentives behind rooftop solar. Haryana, a small state next to Delhi, needs new buildings to draw some of its electricity from it. In the impoverished eastern state of Jharkhand, the government is considering increasing central government subsidies for rooftop solar to make it free for low-income households. Ashwini Swain of the Center for Policy Studies, a Delhi-based think tank, says India is working on a range of such policies. “If everything comes to pass, we may exceed our target.”

If that proves optimistic, it could be because of another bottleneck: protectionism. To boost domestic manufacturing, the government imposed a 40% import duty on Chinese panels and ordered most panels used in solar projects to come from an “approved list” of Indian panels and panel makers. It seems prudent to reduce India’s dependence on China in this regard. Domestic production is strong, says Nandita Sahgal of Thomas Lloyd, an investment firm with 434 companiesMegawatt Solar fields in India may more easily “have India’s projected installed capacity”. For now, however, domestic production cannot keep up with demand.

Electricity Minister RK Singh said earlier this month that it would take seven years to supply solar projects with approved domestic panels. “But we can’t wait seven years.” So the government eased procurement rules for two years. This will allow the import of panels from Southeast Asian countries that have free trade agreements with India. But tariffs on Chinese panels remain.

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