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Insights into Editorial: Sun without subsidy



Insights into Editorial: Sun without subsidy


Forecasts of International Energy Agency (IEA) indicate energy from renewables is expected to overtake coal by the early 2030s. Among renewables, solar stands out. Its cost is falling, which means that for the first time it is possible to promote clean energy without offering large production subsidies.


What’s in it for India?

These developments are crucial for India as the government has bet big on solar. The government’s National Solar Mission has been crafted on the basis of a subsidy for expanding rooftop solar systems. But, according to experts, such systems are inefficient and expensive, compared to large scale solar installations which feed power into the grid. Rooftop solar may make sense only in off-grid locations, or if one wants to enjoy the romance of generating one’s own power.


Solar power potential in India:

  • India has vast solar power potential, where sunshine is available for long hours per day and in great intensity.
  • As per the study conducted by ministry of new and renewable energy (MNRE), India’s solar power potential is as high as 748 GW, against our country’s cumulative installed capacity from all sources at around 275 GW.


Why do we need to harness solar energy?

  • Given the country’s present high dependence on imported fossil fuels for meeting its ever-growing energy demand, India has little choice but to harness solar energy for achieving energy supply security.
  • In addition to a perennial power deficit situation faced by the country, around 300-400 million Indians do not have access to electricity. Hence, increase in share of renewable energy in the overall energy mix is critical for achieving energy security and resultant sustainable development.


Advantages of solar energy:

  • Solar power permits decentralized generation and distribution of energy. Hence, it presents high potential for contributing towards empowering people at grass-root levels in terms of energy access and bringing them in the mainstream of development.
  • Solar power is one of the most promising renewable energy sources. We cannot continue to depend heavily on fossil fuels for meeting all our energy requirements due to inherent limitations of its availability.
  • Distributed generation channels such as solar irrigation pumps would contribute in reducing the significant burden on discoms’ financial health by reducing grid power demand from agriculture.


Is solar power a costly source of power?

  • Solar power in India is largely viewed as a costly source of power. One of the primary reasons why renewable energy is being termed as an expensive source of power is because there is no system in existence for pricing carbon, pollution, and other environmental damage caused by fossil fuels based on conventional power generation plants. Hence, it would be a biased approach to compare solar power with conventional sources without considering the tariff over the life cycle of a power plant.
  • And solar power tariff has been declining rapidly over the years and has almost reached grid parity as is evident from the results of latest round of reverse e-auction conducted by NTPC for 500 MW capacity in Andhra Pradesh under the national solar mission. These bids reassure that in the long run, solar power need not lead to any burden on the financial health of discoms.


Challenges being faced by solar sector in India:

  • The availability of land for solar units is a major problem. Only a few states in the country have come up with firm assurances on land and that too for just a few units of 1,000-Mw capacity each. Most states have big or small patches of waste and barren lands which could safely be allocated for solar energy production. However, their ownership and the willingness of the owners to part with these lands are an issue that needs to be addressed.
  • The lifting of solar power by the distribution companies is also a question mark because of their poor financial health, and because renewable energy purchase obligations may not be effectively enforced.
  • Many investors are asking deeper questions about viability. Nearly one square kilometre of land is needed to put up a 40-60 MW solar plant. Such large chunks of land are not readily available except in isolated areas from which evacuation of power becomes even more difficult.


What factors make solar energy less practical than conventional energy?

  • Solar energy works only when the sun is shining. At night, one cannot depend on solar power.
  • Solar systems do not operate efficiently during monsoons or winters when there is fog. This requires blending of solar energy in the grid with thermal energy – and that poses all sorts of practical problems.
  • Largescale solar energy farms require huge tracts of land. Per GW, solar requires twice as much land as a conventional coal-fired power plant.
  • Capital costs of solar installation are also higher.


Way ahead:

The pace of technological change should trigger a re-evaluation of a subsidy-led approach in India. Germany, for example, has been scaling back solar subsidies without a negative impact on the industry. Solar energy, when generated on a large scale, is on its way to being competitive without artificial boosts. The next phase of policy making should factor this in and take advantage of the fiscal space offered.



Solar power is not the panacea for India’s energy needs. Solar power also has its own share of issues in terms of its effect on overall grid stability, more so in the case of India, where the grid does not have buffer capacities like in the West. However, while plans are being drawn to scale up solar power, equal attention is also being provided to improve transmission corridors and grid management systems through increased investments and budgetary allocations to states to strengthen the network and deploy smart grid framework. To exploit its potential, India’s policy makers must re-craft their solar strategies. Costs must be pruned, and India’s inherent natural advantage of sunlight must be harnessed more judiciously.