Minister of Power R.K. Singh called a meeting yesterday with solar project developers and manufacturers to understand the state of the solar industry in India.
In the meeting, Singh discussed the level of growth in the Indian solar sector, the issues affecting it, and the path forward.
During the meeting, it became apparent that Singh is new to the sector and does not yet understand the landscape of the Indian solar industry. However, he was very interested in learning and hearing what everyone else had to say.
All major solar project developers and module manufacturers attended the meeting. Since this is the beginning of Singh’s tenure, he wanted to test the waters before setting off to achieve his targets.
Right in the beginning, Singh said that there would be no discussion about the ongoing anti-dumping case as the matter is going through due process with another government body.
During the meeting, Singh asked developers and manufacturers to speak about the challenges they face, how to make targets achievable, and best practices in the sector.
Developers mentioned they are having trouble securing land for project construction in certain parts of the country. Manufacturers said there is not a single dedicated policy – other than MSIPs – and said the new minister needs to do something about that.
The developers said, since we know that we must achieve a target of 100 GW by 2022, the government needs to plan for yearly installation targets. This way, developers will know that what amount will be auctioned and they can plan accordingly.
The manufacturers also agreed that if yearly tendering/auction targets are known, then there will be clarity regarding bidding and this gives them insight into how the market will move. At present, there are no such assurances because tendering is inconsistent and auction activity has dropped significantly.
The developers also noted that the government has set a 5 percent Goods and Services Tax (GST) on solar systems, but even after several months the GST is not clear on input, and that has created confusion. For instance, it is not clear how the GST would apply to a solar module that does not constitute an entire solar system and cannot generate power on its own.
At the meeting, it was stressed that the government also needs to create avenues to unlock financing. More institutions are willing to invest, but the government first needs to remove policy bottlenecks so that insurance and pension funds can finance solar energy projects.
The new minister wanted to know the ground reality and how fast the entire manufacturing supply chain could be scaled up. He took inputs from all manufacturers on this topic which should be encouraging to the manufacturers.
The stakeholders also mentioned delays in general dispute resolutions. It was brought to the attention of the minister that there’s only one bench for grievances, in Delhi. There’s a huge grievance backlog, and more appellate bodies are required at multiple locations.
The developers also asked the minister to strictly enforce the sanctity of signed contracts. Recently, states such as Uttar Pradesh, Tamil Nadu, and Jharkhand have manipulated developers into renegotiating the tariffs for power purchase agreements (PPAs).
The only thing Singh said with certainty was that developers should not be penalized if the fault lies with government regulatory bodies.
The meeting could be a good first step for the new minister if he implements policies that answer some of the important issues that were shared with him by attendees.
Image credit: Office of R.K. Singh