Sunny time for solar energy

Some recent government decisions and initiatives on solar energy are in line with the policy to encourage this sector as part of the overall efforts to promote renewable energy production and use. Among the many areas of renewable energy, the solar sector has received special attention because of the relative abundance of sunlight and the possibility of producing energy even at the micro level, unlike in the case of wind or wave energy. But there are disadvantages also which other sectors do not have. The Union Cabinet last month approved a viability gap funding (VGF) of Rs 5,050 crore for setting up 5,000 mw of grid-linked solar projects. The need for VGF shows that the solar projects may take time to become financially viable. But the grant also shows the keenness of the government to promote the sector now so that it will become an important part of the energy basket in future.

The government has also decided to increase the capital subsidy for roof top solar plants from Rs 600 crore to Rs 5,000 crore in the next five years. This is expected to take solar power generation from 500 mw to 4,200 mw. Doubts have been expressed about the need for subsidy when the cost of solar panels has steadily declined over the years. It might fall further. There are tax concessions also. In the case of large solar projects, the recent bidding for a plant in Andhra Pradesh which promised power at the rate of Rs 4.63 per kwh indicates that the solar sector will become very competitive in future. While the decision on subsidy may be a sign of the government’s enthusiasm, it should also take steps to address inadequate grid infrastructure. Transmission of power is as important as production. For this, grid quality has to be improved.

The launching of the Solar Alliance, which had been promised by Prime Minister Narendra Modi at the climate conference in Paris, is yet another initiative. The foundation of the alliance was laid in Gurgaon by visiting French President Francois Hollande last month. It is an ambitious venture with participation from 121 countries which receive more than 300 days of sunlight a year. The aim is to make efforts to reduce the cost of finance and technology for solar power, and development and adaptation of technologies to suit the needs and conditions of member countries. It also aims to increase international cooperation in all aspects relating to solar power. The alliance has the potential to develop into a major international institution.
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