Mitigating the challenges in solar project development

In recent years, India has made significant progress in developing its solar market, driven by a combination of government support, technological advancements, and increasing awareness of the need for sustainable energy solutions. The nation’s commitment to renewable energy has been highlighted by various policy measures and initiatives aimed at boosting solar capacity installation. However, the year 2023 witnessed a notable slowdown in the growth of installed solar capacity, prompting a closer examination of the factors influencing this deceleration.

With an understanding of the solar potential in India, vis-a-vis the globe, the government has set ambitious green targets for the country. While we have created a robust framework towards achieving this goal, pursuing an approach that focuses on increasing the efficiency of this framework can help stabilize the sector for the long term.

Supply chain disruptions

The solar industry faced disruptions in the global supply chain, impacting the availability and cost of solar equipment. Delays in equipment delivery and increased prices affected project timelines and financial viability. While these were uncontrollable external factors, getting rid of specific tariff and non-tariff barriers which were created domestically could have helped. For reference, considering the initiatives taken by the government, the future of solar modules manufacturing is bright in India; however, till we have an adequate manufacturing base, for high-efficiency modules, within the country, these barriers create uncertainty amongst stakeholders.

While we all appreciate the need and impacts of building a robust manufacturing base within the country, I suggest removing such barriers until an adequate solar manufacturing capacity encompassing the complete value chain is established. This gives enough time to both the manufacturers and developers to proceed in their respective directions, which eventually culminates in creating a resilient solar sector for India.

Policy homogeneity

Changes in government policies and regulatory uncertainty, including the interpretation and implementation issues between Centre & State Government(s), deter investors. There is an urgent need to ensure the standardization of policies and procedures across the Centre and State. A case in place, The GNA Regulations, 2022 and IEGC Regulations, 2023, which are operationalized for inter-State transactions, should ideally dictate the Open Access and Scheduling procedures at the State levels, where the ultimate consumer rests.

However, State-level procedures are currently anchored in the existing Open Access Regulations and corresponding State Grid Code Regulations. This divergence complicates and delays open access procedures, especially for interstate transactions involving state-embedded C&I consumers. SERCS must integrate the GNA concept by formulating and implementing updated GNA Regulations at the State level to realise GNA rules.

Similarly, there are instances of net-metering regulations, captive definitions, etc., with major gaps. Such uncertainties and differences need to be addressed so that we can extend a homogeneous policy framework within the State(s) and Centre for boosting the investor’s confidence.

Grid infrastructure and land acquisition issues

As the solar capacity increased, challenges in grid integration emerged. Issues related to grid stability, intermittency, and the lack of sufficient energy storage solutions hindered the seamless assimilation of solar power into the national grid.

Similarly, securing suitable land parcel closure to the grid substations is a pressing challenge.

While there is an immense appetite within the investor community to set up huge giga-scale solar projects, the development efforts sometimes get obstructed by lagging grid infrastructure preparedness and issues with land acquisition. A program facilitating the development of huge solar parks nationwide with ready grid infrastructure (both ISTS and intra-state connectivity) will be beneficial for solar developers.

Developing the solar market in India has been a multifaceted journey marked by commendable achievements and occasional challenges. While the government’s support has been instrumental in fostering growth, addressing the identified challenges, ensuring policy stability, and promoting technological innovation will be critical to reignite momentum and achieve India’s renewable energy targets in the coming years. The solar sector remains integral to India’s sustainable development goals, and concerted efforts are needed to overcome the hurdles and create a robust, resilient solar market.