Renewable energy shines, solar outperforms

Some favourable policies, combined with good market conditions, have seen the renewable energy sector emerge as a sunshine industry. Solar, in fact, has made considerable progress. Over the last four years, large-scale solar has seen an average annual growth rate of over 70 per cent. The installed solar capacity has increased from 2.6 GW in March 2014 to 23.1 GW in June 2018 — large-scale solar comprises over 94 per cent of this. At under ₹ 3 per unit on an average, wind and solar energy is now cheaper than coal power.

Inconsistent policy has been the bane of the sector. Says Priyavrat Bhati, advisor, energy group, CSE: “Nothing can be more disruptive for an emerging sector that seeks to attract global investors, than ad hoc and abrupt policy changes.” A classic example is that of the solar module manufacturing industry. The government had reserved auction capacity for domestic manufacturers, but this drew a World Trade Organisation censure. Import duties have been applied and then removed; currently, a safeguard duty of 25 per cent is being levied on imported modules. The wind industry has been caught unawares as well, by the introduction of an auction-based regime to award bids from the feed-in tariff (FiT) process.

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