Prelims level : Environment Mains level : GS-III Technology, Environment, Economic Development
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Why in News:

  • Renewable energy sector stifled by a host of issues — from low tariffs to lack of government push

Background: / What is the actual status of renewable energy installations?

  • In 2015 Union government has announced 175 GW of renewable energy installations, recently the target has been increased to 225 GW. If India hits the 175 GW target, it stands to meet its greenhouse-gas emission goal under the Paris climate agreement. Of the current goal of 100 GW from solar energy by 2022, 40 GW is to come from rooftop installations, and 60 GW from large solar parks. But India has missed several interim milestones since it announced its 175 GW target. The obstacles have capped capacity addition to 69 GW till date, with India missing its 2016 and 2017 milestones. The misses happened despite renewable capacity being augmented at a blistering pace.

What are the challenges in achieving the ambitious target?

  • Lower Margins – Wind and solar tariffs have hit such low levels that suppliers are working with wafer-thin margins. Rooftop solar clocked a compound annual growth rate of 117% between 2013 and 2017 India only hit 3% of its goal by the end of 2017. Policy Lacunas – In the solar sector alone, which the government is prioritising, policy uncertainties loom large. Homeowners aren’t warming up to the idea of installing photovoltaic panels on their terraces because the economics does not work out for them. Practical challenges – Technological and financial challenges remain, both wind and solar generation could be erratic.

What measures needs to be taken?

  • India’s creaky electricity grid must be modernised to distribute such power efficiently.
  • To hit its 2022 target of 175 GW, 106 GW will have to be added in four years, more than twice the capacity added in the last four. Manufacturers of photovoltaic (PV) cells have demanded a 70% safeguard duty on Chinese PV imports, and the Directorate General of Trade Remedies need take a call on this. Policies favouring homeowners to sell electricity back to the grid, needs to be incorporated with a nationwide “net-metering” policy.
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