Solar energy: 100 GW Target

IT takes a reality check on the government´s target to achieve 100 GW of solar energy production under the Jawaharlal Nehru National Solar Mission.
On June 17, 2015, the Centre approved the proposal to boost the country´s solar power capacity target under the National Solar Mission by five times, to achieve 100 GW by 2022. This target has been bifurcated into 40 GW from rooftop and 60 GW through Large and Medium Scale Grid Connected Solar Power Projects. This entails an overall investment of Rs.600,000 crore.

A Back then, this target was over 40 per cent of the total installed generation capacity of the country, which was at 240 GW. Again, it envisaged to achieve this from only solar power, which was still at a nascent stage of development. The Jawaharlal Nehru National Solar Mission was launched on 11th January, 2010. The Mission had set the ambitious target of deploying 20,000 MW of grid-connected solar power by 2022. It had envisaged to achieve grid tariff parity by 2022. With solar prices falling over the last five years, the Centre has decided to take a plunge into solar power generation.

India has also announced that it will ensure about 40 per cent of its electricity comes from non-fossil fuel sources. A major share of this will come from solar power. ´It is a good opportunity for solar panel producers because they will get a good market. It is very good for the consumers as well, because they can generate during the daytime and use net-off facility. So, whatever he generates, the bill gets adjusted accordingly,´ says Mahesh D Paranjpe, Chief – Hydro Renewable Operations and Safety, Tata Power.

Power Minister Piyush Goyal said recently, ´We are looking at achieving the 100 GW target of installed capacity of solar energy by the end of 2017 itself.´ In mid-January, the country´s grid-connected solar power generation capacity crossed the 5,000 MW mark. Rajasthan, Gujarat and Madhya Pradesh are leading solar power adoption.

For India, from an energy security perspective, solar is the most secure of all sources, thanks to its abundance.

Rajasthan, Jammu & Kashmir, Maharashtra, Madhya Pradesh and Andhra Pradesh are estimated to have 59 per cent of the national potential with 438.19 GW.

The Centre has been encouraging state governments to start adopting their own support policies. It has launched the Surya Mitra Scheme, encouraged the setting up of Solar Parks, and tightened enforcement of Renewable Purchase Obligations, among other initiatives.

The government will also scale up of the budget outlay of ´Grid Connected Rooftop and Small Solar Power Plants Programme´ under the Solar Mission from Rs.600 crore during the 12th Five-Year Plan to Rs.5,000 crore for implementation over 2015-2020. Twenty-six states have state-level grid-connected rooftop policies in place. By end-June 2015, 23 states had rooftop policies. A total of 27 state electricity regulatory commissions had their regulations and power tariff policies in place. ´Goa Energy Development Agency (GEDA) has formulated its solar policy. The policy has been forwarded for approval by the state government before it comes into effect,´ says Dr Pramod Pathak, Member Secretary, Goa Energy Development Agency. GEDA is concentrating on smaller capacity plants distributed all over the state, and is promoting solar rooftop plants.

However rooftop solar is still a costly proposition for individual customers to set up a system for self-consumption, feel industry sources.

´Nevertheless, Karnataka, for example, is increasing the benefits of its net metering scheme, where consumers receive credits for pumping energy back into the grid. Tamil Nadu is also mandating that any building above four stories should spare 30 per cent of the space for PV systems. If a couple of more states work in this direction, then the momentum will build across the country,´ says Rahul Gupta, Managing Director, Rays Power Experts Pvt. Ltd.

But a few observers strike a cautionary note. ´More recent state policies have seen too much of volatility, non-transparency and unpredictability to really win the confidence of a wider investor community. Much still seems half-baked,´ Gupta says, emphasising on the need to streamline the policy-making processes.

Land, the critical factor
Land is a critical component for mega field-based projects and the most disputed one. Solar plants need about 4-5 acres of land per MW of capacity. Financial closure for large projects is contingent on availability of land parcels of required sizes. Land is also needed for laying transmission lines.

´Solar would require a lot of land, so barren land is the only solution. Otherwise you go for rooftop, which is more on a domestic level,´ says Rathin Basu, Managing Director, Alstom India T&D Limited.

According to Paranjpe of Tata Power, solar bids are of two types.´One is, those who have land available with them, they can quote (the supply price), or the government says that it will give you land at a specified price and you quote for it.´

In Goa, there is an acute shortage of non-agricultural and fallow land. GEDA is pursuing stakeholders to bring under projects abandoned mine land where the silted deposits have rendered the land infertile. ´GEDA is also pursuing with the Water Resources Department for the canal area where rooftop solar power plants can be set up along with the canal land. The potential land allocation from the canal area is expected to yield capacity of 25-30 MW,´ says Pathak.

Evacuation
´Intermittency of solar power is a huge challenge, underestimated by planners today. The amount of renewable energy we are planning to put in the grid requires a huge investment in managing power flow and stability of weight to happen,´ says Rathin Basu.

Today, India has 290 GW of capacity; by 2022, it could reach 450 GW in generation.

Net metering
Net metering is important to make the Rooftop PV and Small Solar Power Generation Plants (RPSSGP) scheme a success. As of May 2015, 19 States/UTs had formulated a net metering policy. In the absence of recommended uniform guidelines, different States had adopted different models for implementing net metering.

Implementation
As of now, the project is at the policy formulation stage; implementation is yet to pick up. MNRE plans to add 12 GW of solar power capacity in 2016-17.
This is a massive target compared to the target set for 2015-16 of just 1.4 GW. For 2015-16, solar power capacity addition target was set at 1,400 MW, and 1,489 MW capacity was added by January 31, 2016. The country´s grid-connected solar power generation capacity has crossed the 5,000- MW mark, in mid-January 2016.

´There are currently just over 10 GW of solar projects under development. About 8.4 GW (is) expected to be auctioned off over the next few months,´ says Raj Prabhu, CEO and Co-Founder of Mercom Capital Group.

Around 26 states and some Union Territories have prepared guidelines for installing rooftop solar power systems.

Achieving 40 GW of rooftop solar capacity is not a difficult target to achieve, but financing of household rooftop is yet to evolve. The Department of Financial Services has issued the following advisory to all Public Sector Banks: ´All banks are advised to encourage the home loan/home improvement loan seekers to install rooftop solar PVs and include the cost of such equipment in their home loan proposals just like non-solar lighting, wiring and other such fittings.´

Issues
The proposals in the recent Budget to bring down the depreciation on solar and wind plants by half is a big blow to this nascent industry. Though clean environment cess has been doubled, how much of it will come to the rescue of solar industry is a billion dollar question.

The Solar Energy Corporation of India (SECI), a public sector non-profit firm, has its work cut out for it as a nodal agency of NSM. However, it has received flak from the industry for proposing to shrink implementation deadlines for solar projects.

The road ahead
Solar power is an idea whose time has come. However, experts are of the opinion that the target can possibly be achieved only by 2022. Trying to achieve it by 2017-end seems an impossible task.

In the past, a holistic approach of concentration on generation, transmission and distribution was not taken for the power sector. This has deprived the country of uninterrupted 24-hour power supply.

This blunder should not be repeated in the solar sector. The Mission should take all its components along with solar generation.

Transmission is one of the critical components for solar evacuation and distribution. Building capacities without evacuation facilities will lead to the current situation faced by the new coal- and gas-based power plants. They have been lying idle for want of power purchase agreements (PPAs).

Setting up of smart meters and net metering is also essential for giving momentum to the Mission.

The government should take into consideration the multiplicity of transmission capacities that may be required for solar power transmission and gear up for the additional investments that may be called for.

Finance is the lifeblood of the solar industry.
This is particularly true when its stakeholders include individual households. The government, in association with banks, should evolve all kinds of financial modelling tools that will help reaching out to all sections of people and see that they are followed by banks.

The government has also to ensure that the benefits reach the right people and plug possible leakages in the implementation of the Mission.

– BS Srinivasalu Reddy