The World's #1 Renewable Energy Network for News, Information, and Companies.
Untitled Document

India’s Account Deficit Likely to Derail the National Solar Mission

The rising current account deficit (CAD) of India is likely to derail the country’s ambitious National Solar Mission (NSM).

The current deficit of US$98 billion in the calendar year 2013 is steadily rising, as the much-touted GDP growth rate has come crashing down from highs in the double-digits to under four percent. Consequently, the CAD to GDP ratio of 4.9 percent is experiencing new highs as the central government fails to return confidence to the market place.

The second phase of the National Solar Mission has not yet taken off. It was targeted to achieve almost 4,000 MW of solar power project installations under the central scheme and 6,000 MW under state schemes. Of these, 3,600 MW of installations were targeted in for 2013-14 and 2014-15.

On the action side, the draft policy document of the second phase was released by the Ministry of New and Renewable Energy (MNRE) in December 2012. The ministry conducted consultative meetings with various stake-holder groups, hoping to be able to launch the programme in February 2013. It is now September, and there is still no final policy document.

In a related measure, from February of this year, the MNRE stopped accepting applications for the 30 percent subsidy it offered to all rooftop and off-grid power projects. It is not yet clear as to when this window will re-open.

The current account deficit has devalued the local currency by over 20 percent over the last few weeks, with pressure mounting on the government to push forward reforms and reduce subsidies. On the latter count, the second phase of the solar mission surely will take a hit as its most-critical component is viability-gap funding (VGF) — a direct form of subsidy to cover the cost of a solar power project up to 33 percent. The actual figure of this subsidy could well go up to US$1.5 billion — something that the treasury will certainly not allow.

Absence of any such programme, devaluation of the local currency by 20 percent, non-enforcement of solar power purchase obligations and slow sale of renewable energy certificates (RECs) on the nation’s two energy bourses will majorly impact the country’s solar power sector and various stake-holders.

This scenario is actually a bitter pill that the industry will have to swallow, go beyond various government and regulatory dependencies, and explore opportunities in a three-dimensional matrix that would use the local states, business segments and timelines as the three axes.

The rising cost of conventional power and the non-availability of adequate power offer solace to the industry that the consumers will eventually adopt solar power in a country which is blessed by the Sun for over 300 days in a year.

Lead image: Change purse via Shutterstock

Untitled Document

RELATED ARTICLES

Sunrise in Pakistan as the Country Delves into Solar PV

Robert Harker Pakistan has joined the list of countries that are exploring solar power as a means to bridge critical energy generat...

Global Renewable Energy Roundup: China, Kenya, Turkey, India Seeking More Renewables

Bloomberg News Editors China is being encouraged by three industry groups to double the nation’s solar-power goal for 2020 to make up for sh...

Why Smarter Grids Demand Smarter Communications Networks

Mark Madden

Historically, utility networks and communications networks have had little in common.

The Importance of “Switching Costs” to the US Residential Solar Industry

Paula Mints The DoE and numerous organizations and governments globally are focused on driving down the cost of solar convinced t...

PRESS RELEASES

AWS Truepower Announces Major Expansion of its Due Diligence Team in Response to Growing Market Demand

AWS Truepower, an international leader in wind and solar energy consulting and engineer...

20 days to GRC Annual Meeting & GEA Geothermal Energy Expo

The Geothermal Resources Council (GRC) has announced that it is only 20 days to go to t...

Canadian Solar Announces Partnership in 200 MW Tranquility Solar Power Project

Recurrent Energy signed an agreement with Southern Power to partner on the Tranquility ...

Array Technologies’ DuraTrack HZ v3 Continues to (R)evolutionize at SPI

Array Technologies, Inc. (ATI) prepares to showcase its recently launched tracking syst...

FEATURED BLOGS

NATiVE Recognized for Excellence at 2015 Greater Austin Business Awards

NATiVE Recognized for Excellence at 2015 Greater Austin Business Awards NEWS RELEASE AUSTIN, Texas – Aug. 27...

Solar Energy Means Jobs, Savings, and a Low-Cost Future [infographic]

There are a lot of utility-sponsored legislative and regulatory attacks on solar energy lately, and we put together t...

How To Get People To Do Stuff

It’s no secret that psychology and sales go hand in hand. If you understand the principles of human psychology ...

Get In The Groove

When we talk about strategies for boosting productivity, we often overlook the fact certain projects lend themselves ...

FINANCIAL NEWS

Bhupesh Trivedi is the CEO of Mumbai-based solar power consulting firm REECODE Energy Solutions. He has spoken at a few climate change and solar power conferences in India and consulted solar investors, EPC contractors and vendors in India. He is ...

CURRENT MAGAZINE ISSUE

Volume 18, Issue 4
1507REW_C11

STAY CONNECTED

To register for our free
e-Newsletters, subscribe today:

SOCIAL ACTIVITY

Tweet the Editors! @jennrunyon

FEATURED PARTNERS



EVENTS

Intersolar North America 2016

Exhibition: July 12 - 14, 2016; Conference: July 11 - 13, 2016 Intersola...

Intersolar South America 2015

Exhibition and Conference: September 1-3, 2015 Intersolar South America ...

Intersolar Europe 2016

Exhibition: June 22-24, 2016; Conference: June 21-22, 2016 Intersolar Eu...

COMPANY BLOGS

Less Is More

When you’re giving a presentation, one of the easiest things to do...

Captivology

One of the biggest challenges we face as efficiency sales professionals ...

How To Optimize Your Meeting Schedule

Do you spend more time in meetings than you do actually working? While m...

NEWSLETTERS

Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now  

 

FEATURED PARTNERS