India’s Solar Policy: JNNSM

The National Solar Mission is an initiative of the Government of India and State Governments to promote solar power. The mission is one of the several policies of the National Action Plan on Climate Change. The program was inaugurated as the Jawaharlal Nehru National Solar Mission.by former Prime Minister Manmohan Singh on 11 January 2010^.with a target of 20 GW by 2022. This was later increased to 100 GW by Prime Minister Narendra Modi in the 2015 Union budget of India. India increased its utility solar power generation capacity by nearly 5 times from 2,650 MW on 26 May 2014 to 12,288.83 MW on 31 March 2017. The country added 9,362.65 MW in 2017–18, the highest of any year. The original target of 20 GW was surpassed in 2018 (counting only utility installed capacity), four years ahead of the 2022 deadline. India had a total rooftop solar installed capacity of 6.1 GW as of 30 June 2021. The objective of the National Solar Mission is to establish India as a global leader in solar energy, by creating the policy conditions for its diffusion across the country as quickly as possible. Under the original plan, the Government aimed to achieve a total installed solar capacity of 20 GW by 2022. This was proposed to be achieved in three phase. The first phase comprised the period from 2010 to 2013, the first year of the 12th five-year plan. The second phase extended up to 2017, while the third phase would have been the 13th five-year plan (2017–22). Targets were set as 1.4 GW in the first phase, 11–15 GW by the end of the second phase and 22 GW by the end of the third phase in 2022. Increased  100 GW is further divided into 40 GW of solar rooftop, 40 GW of Ultra mega solar power projects (500MW or more) and 20 GW is independent solar powerplant (miscellaneous). Based upon availability of land and solar radiation, the potential Solar power in the country has been assessed to be around 750 GWp.

The Government revised the target from 20 GW to 100 GW on 1 July 2015. To reach 100 GW by 2022, the yearly targets from 2015 to 2016 onwards were also revised upwards. India had an installed solar capacity of 161 MW on 31 March 2010, about 2 and half months after the mission was launched on 11 January. By 31 March 2015, three months before the targets were revised, India had achieved an installed solar capacity of 3,744 MW.

The ministry of new and renewable energy (MNRE) set target of 450 GW of renewable energy by 2030. The last target was 175 GW out of which 100 GW by solar energy by the end of year 2022. In the first phase of JNNSM (2010-2013) 50 rupees cess on per tonne of coal imposed on coal producing companies. In second phase (2013-2017) this cess was increased to 400 rupees (2014) and this cess was named as clean environment cess. This amount of cess was transferred into national clean energy fund. The money collected by this was funded for next phase (2017-2020). In 2013 GOI came with proposal of domestic content requirement for financial support of solar power producer. Two conditions were imposed on solar power producers. First one was the government (central/state/PSUs) is buyer and second one was a certain % of solar panel must be bought by domestic solar companies.

Rooftop Phase-I of this programme was launched on 30th December, 2015 in which incentives and subsidies were provided for residential, institutional and social sectors. For Government sector, achievement linked incentives were also provided. Rooftop Phase-II was launched in February 2019 with a target of achieving cumulative capacity of 40,000 MW by the year 2022. Under rooftop solar scheme, Central Financial Assistance (CFA) of 40% for RTS systems up to 3 kW capacity and 20% for capacity beyond 3 kW and up to 10 kW is provided. For Group Housing Societies (GHS) and Residents Welfare Associations (RWA), CFA is limited to 20% for RTS plants for supply of power to common facilities. So far over 3.7 GW capacity of RTS capacity has been estimated to have been installed in the country and over 2.6 GW capacity is under installation in the residential segment. The Ministry introduced the Solar Parks programme with the objective of facilitating solar project developers to set up projects in a plug-and-play model. The scheme for development of solar parks has a target capacity of 40 GW. All States and Union Territories are eligible for getting benefitted under the scheme. Solar parks are being developed by agencies of Central/State Governments, Joint Ventures between agencies of Central and State Governments and also by private entrepreneurs.

In Off grid GOI’s initiatives are PM- KUSUM, solar street lights/Atal jyoti yojana /AJAY (3 lakhs), Solar study lamps (25 lakhs), 100 MWp of off grid solar power projects, 7 million study lamps for school going children (50% unelectrified households /50% kerosene using households) and scale up of excess to clean energy for rural livelihood (solar energy for supporting poultry, horticulture, solar cold storage).

PM-KUSUM has three components:

1: 17.5 lakh stand-alone isolated solar pumps with capacity up to 75 Hp for agriculture sector

2: Solarization of 10 lakh grid connected pumps with capacity up to 75 Hp.

3: 10 GW of grid connected solar power of size 2 MW.

For solar rooftop SARAL INDEX (State rooftop solar attractiveness) is initiated by MNRE. In this initiative rank is given to the Indian states for their policy initiative for solar power performance. NET metering concept is also introduced. SECI was established in 2011 whose purpose is to do execution of solar power project in India.

As on 31.12.2020, a total solar power capacity installed is 37.46 GW. In addition, tenders of around 36.69 GW are in pipeline for which Letter of Intent (LoI) has been issued but not commissioned and for around 18.47 GW tenders have been issued but LoI are yet to be issued. Thus, it is expected to fully achieve the target of 100 GW by 2022. It is expected that the solar power projects of around 40 GW cumulative capacity will be commissioned by March, 2021.

Karnataka(7.328 GW), Rajasthan(5.389 GW) and Tamil Nadu(4.315 GW) are top performing states in the field of solar energy installed capacity.

India has become a global leader in renewable energy (RE) by achieving the milestone of 100 GW solar capacity in a decade. This article discusses the evolution of RE policies in India over the last decade that have enabled this achievement.

In 2006, the National Tariff Policy (NTP) introduced competitive bidding and Renewable Purchase Obligations (RPOs) to promote RE. The NTP recognized that RE tariffs were expensive compared to conventional power but would eventually have to compete with them at full cost.

In 2010, the National Solar Mission (NSM) was launched to develop and deploy solar energy technologies. It included measures to support research and development, human resource development, technical capacity increase, awareness of these technologies, and enabling domestic manufacturing through exemptions and incentives. It brought about policy certainty and addressed risks for investors and financiers by mitigating offtake and payment risks.

The Green Energy Corridor project in 2013 addressed transmission and curtailment risks while the NSM Phase II Batch I in the same year provided financial support for project developers. The Solar Park Development Scheme in 2014 lowered tariffs for discoms through competitive bidding and addressed roadblocks in land acquisition and environment clearances.

The National Tariff Policy of 2016 created a demand for RE by setting a national trajectory for RE’s share in consumption. It managed offtake and payment risks, and the commencement of competitive bidding in wind power in the same year lowered tariffs for discoms.

Green hydrogen, produced through the electrolysis of water using renewable energy sources, has the potential to transform the global energy system and reduce carbon emissions. India, with its abundant renewable energy resources and dependence on imported fossil fuels, has a unique opportunity to become a major player in the green hydrogen market. However, the economic viability of green hydrogen production in India depends on several factors, including the cost of electrolysers and electricity, operating costs, transmission and distribution (T&D) costs, and local duties and taxes.

According to a report by Rocky Mountain Institute (RMI), the cost of hydrogen from electrolysis today is relatively high, between around $7/kg and $4.10/kg depending on various technology choices and associated soft costs. This makes it hard to compete with the existing cost of grey or brown hydrogen. However, India has some of the most competitive levelized cost of electricity (LCOE) for solar and wind in the world while remaining a net importer of natural gas. Given the promises of electrolyser cost and LCOE decline, it is more beneficial to expand green hydrogen production in India rather than production of grey or blue hydrogen.

The RMI report suggests several measures that can help reduce the cost of green hydrogen production in India today. Specifically targeting duty waiver and reduction of the GST and T&D charges, the levelized cost of hydrogen (LCOH) can be reduced to around $3.2/kg in the best case, making it closer to becoming competitive with grey hydrogen. The Ministry of Power already waives inter-state transmission system charges for electricity generated from wind and solar. Extending this waiver to renewable-based hydrogen production can drastically improve the near-term economics of green hydrogen.

India should also strive to reduce renewable power tariffs for hydrogen production. These could include revenue recycling of any carbon tax or coal cess, low-emissions PPAs, and avenues for firming electricity supply including discounted grid electricity to complement the VRE generation.

Building a Resilient Solar PV Supply Chain

India has set ambitious targets to increase its solar power capacity to 450 GW by 2030. To achieve this, the country needs to develop a strong domestic supply chain in the solar PV market. This would not only reduce reliance on imported components, but also create jobs and boost the economy. In this article, we discuss how India can develop its domestic supply chain in the solar PV market by taking cues from the US market, and by considering key labor cost drivers.

Developing a resilient supply chain is crucial to achieving the Solar Futures scenarios. PV-related industries can experience production disruptions, especially those that require large-scale facilities for cost-effective production. For example, nearly 15% of global polysilicon capacity went offline owing to incidents in China over a 6-month period in 2020, which resulted in temporary increases in spot prices. Disruptions due to the COVID-19 pandemic provide another recent example. One study found that COVID-related balance-of-system (BOS) supply shortages alone could result in 300–700 MWdc of utility-scale project delays

Crude Oil Prices Drop Below $70: What It Means for the Polysilicon Market

“As one of the most essential commodities in the world, crude oil is not just a reflection of global supply and demand, but also a barometer of global geopolitics. The recent drop in crude oil prices below $70 has implications beyond just the energy sector, with potential ripple effects felt across industries such as the polysilicon market, which relies heavily on energy costs. Keeping a close eye on the intersection of global politics and commodity prices can provide valuable insights into the direction of markets.”

Crude oil is an essential commodity that plays a vital role in the global economy. It is a fossil fuel that is used for energy generation, transportation, and various industrial purposes. The price of crude oil is influenced by a wide range of factors such as global demand, supply levels, political tensions, and economic indicators. Recently, crude oil prices fell below the $70 mark, and this has raised questions about the impact on the polysilicon market.

Polysilicon is a material that is used in the production of solar panels. It is a key component that determines the efficiency and durability of the panels. The price of polysilicon has a significant impact on the cost of producing solar panels, and as such, it is closely linked to the price of crude oil. The reason for this is that the production of polysilicon requires a significant amount of energy, and the cost of energy is heavily influenced by the price of crude oil.

When crude oil prices fall, the cost of energy production also decreases. This, in turn, reduces the cost of producing polysilicon, making it cheaper for manufacturers to produce solar panels. As a result, the price of solar panels also falls, making them more accessible to consumers. This can lead to an increase in demand for solar panels, which can further drive down their prices.

However, it is worth noting that the relationship between crude oil prices and polysilicon prices is not always straightforward. There are other factors that can influence the price of polysilicon, such as supply and demand dynamics, technological advancements, and government policies. For example, the recent oversupply of polysilicon in the market has also contributed to the fall in prices.

In conclusion, the recent fall in crude oil prices below $70 has the potential to impact the polysilicon market, as it can lead to a reduction in the cost of energy production and the cost of producing solar panels. This, in turn, can increase the accessibility of solar panels to consumers and drive demand for renewable energy. However, the relationship between crude oil prices and polysilicon prices is complex and influenced by a wide range of factors. Therefore, it is important to monitor market trends and factors that can impact the polysilicon market to gain a deeper understanding of its dynamics.

India’s Solar Journey: From Feed-in Tariff to Reverse Bidding

Competition is the catalyst for progress, and the Indian solar industry is a perfect example of how moving from a monopolistic market to a competitive market has led to significant advancements and achievements.

India’s solar journey has been marked by significant progress and achievements over the past decade. The Jawaharlal Nehru National Solar Mission (JNNSM) launched in 2010 aimed to add 20 GW of solar power by 2022. The initial feed-in tariff of Rs 17.91/kWh provided a boost to the solar industry, but it did not result in significant capacity addition. Therefore, subsequent bids were adopted based on a reverse bid mechanism that introduced competition among solar developers.

The falling equipment prices and increased competition led to a reduction in tariffs by over 30% in solar bids. The reverse bidding process, which allowed for competition, has resulted in the lowest solar tariffs ever in the world. In 2017, solar tariffs fell to Rs 2.44/kWh, and in 2020, it reached an all-time low of Rs 1.99/kWh.

Increased competition and falling equipment prices have enabled the government of India to achieve its targets of NSM. The data shows a significant increase in the total capacity addition of solar power in India from 35 MW in 2010 to 5,513 MW in 2020, despite a dip in 2020 due to the COVID-19 pandemic.

The success of the reverse bidding process can be attributed to the falling prices of solar panels, which have decreased by almost 80% in the past decade. The government has also played a significant role in supporting the solar industry through various policies and incentives.

While India has achieved its 100 GW RE capacity, increasing the penetration of renewables in India’s grid poses significant challenges. One of the major challenges is grid stability, as solar and wind energy are intermittent sources of power. The government has introduced energy storage technologies such as batteries and pumped hydro storage to address the issue of grid stability.

In conclusion, India’s solar journey has been remarkable over the past decade. The shift from the initial feed-in tariff regime of Rs 17.91/kWh to the reverse bidding process that resulted in tariffs as low as Rs 1.99/kWh has been enabled by increased competition and falling equipment prices. While challenges remain in increasing the penetration of renewables in India’s grid, the government is taking steps to address them and is well on its way to achieving its 450 GW solar targets by 2030.