Ashish Gupta, Observer Research Foundation
The Delhi Dialogue Commission recently presented the draft solar policy for Delhi in a meeting with Non Government Organisations (NGO’s), discoms, power department officials and others. The highlights of the policy included developing Delhi as a solar city and generating about 1,000 MW between 2015 and 2020 when the policy will be implemented.
The draft policy is also proposing various incentives for making the proposed policy a success. But unfortunately the stakeholders who participated in the meeting expressed concern over the viability of such policy on a large scale. Even the discom officials were not sure whether the proposed policy will be a boon or bane for them. The NGOs who participated in large numbers are of the view that without government support the proposed policy will not take off. The proposed policy is based on the pattern of Haryana Solar Policy.
On September 3, 2014, Haryana government released order no. 22/52/2005-Spower making solar power mandatory for all industries, schools, hospitals and commercial institutions. Even after having a coherent and straight forward policy the solar power deployment did not take off in a big way. From 2011 – 2015, Haryana has added only 18.8 MW solar power capacity. This simply gives an indication that there are no consumer groups, be it commercial institutions, malls, office spaces, rich bungalows, schools, hospitals etc who are seriously interested in deploying solar rooftops. Though many are of the view that this is because of the lethargic implementation of the policy in the State ground reality suggests otherwise. This is quite evident from the data on solar power capacity in the state showing clear preference for the cheap (coal) as a source of power generation. This also means that poor deployment is not due to policy lacuna but is due to commercial concerns.
India has been making a strong push for solar energy since 2010, but installing solar panel kits to meet residential electricity still remains a distant dream because of the high initial costs involved. Coming to Delhi the net metering scheme that would have facilitated excess energy generated through rooftop solar systems to be sold to the power grid has not taken off. Even with net metering the scheme may not have taken off. The government needs to learn from its past mistakes and find out why the policy failed.
Apart from that, the Delhi government must differentiate between myth and the reality. It is believed that solar power is comparable to coal based electricity as the tariff bids have come down sharply. The big question is how did the tariffs came down? That is because of the huge subsidy extended by the government to the developers including but not limited to 30% viability gap funding, accelerated depreciation, 30% capital subsidy etc. Added to this is the reduction in global price of solar equipment on account of subsidies extended to manufacturers in China as well as the tariff subsidies offered in countries like Germany which has created artificial demand. Surprisingly even after getting such a huge subsidy, solar power tariffs still do not match coal electricity prices. Even the few installations that have been made are due to huge subsidy/ incentives given by the government.
The situation has changed for the Ministry of New & renewable Energy (MNRE) as it has stated via order no. 5/34/2013-14/RT, that due to limited budgetary provisions, it may not be possible to provide central assistance / capital subsidy to all categories of beneficiaries. Therefore all State Nodal Agencies, State Departments, Commercial Establishments, Channel Partners, System Integrators etc. are advised to set up grid connected rooftop projects without waiting for the subsidies of MNRE.
Therefore if the Delhi government implements the policy in haste by making it mandatory for all the government institutions, commercial establishments etc to install solar rooftop, it is going to be huge burden not only on the utility but also on the government. Whether Central or State assistance it ultimately means taxpayers money. Why should the common man be penalised for policies that are not viable? The Delhi government must weigh the pros and cons of the proposed policy and only then try to implement it on large scale.
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Courtesy: Energy News Monitor | Volume XII; Issue 11