India: Challenges faced by the Solar Power sector

September 25, 2018


With the fuels depleting at an accelerated pace and the awareness about the harmful effect resulting from their consumption thereby polluting the environment, efforts are being made to switch over to nature friendly renewable sources of energies. These sources are not only available in abundance but also can be used repeatedly without hampering the environment. One such resource is solar power. Being close to the equator, the geographical location of India allows solar radiations in sufficient quantity.

The significant contribution to the efficient solar power utilization comes from its various States like Rajasthan, Gujrat, Madhya Pradesh, Maharashtra, Andhra Pradesh, Karnataka, Tamil Nadu and Kerala.

Troubles for Efficient use of the solar energy

Although, India uses solar energy to a great extent, more than 90% of solar panels and modules used in Indian solar projects are imported. Therefore, India still relies on other nations for the utilization of solar power. With a view to reinforce the concept of “Make in India” and considering the interests of the domestic manufacturers, vide its notification dated July 30, 2018, intimated the imposition of safeguard duty whereby tax would be levied on the import of solar panels.[1]

While the Orissa High Court stayed the imposition of the safeguard duty [2], the Supreme Court vide its judgement dated September 10, 2018, set aside the said order thereby permitting the levy of the safeguard duty.[3]

The Ministry of New and Renewable Energy has also decided to cap the tariffs for all future solar bids at INR 2.50 per unit while an additional safeguard duty when imposed shall add the margin of INR 0.18 per unit.[4]

While the Government has been constantly promoting the usage of environment conducive techniques with the objective of reduction of pollution and relying on sustainable sources of energies to meet the needs, the hurdles posed on the implementation of solar energy makes it unviable as it limits the possibilities for developing viable solar projects anywhere in India. At this stage of increasing transformation towards adoption of renewable sources of energies requires incentivizing policies encouraging solar energy network to be well-established in the country.





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