The Indian government has decided to offer 30% subsidy to all homeowners who opt to install solar panels on their rooftops. According to reports, the final announcement giving the details of the program will be announced next month by the Ministry of New and Renewable Energy. With some states already offering 20% subsidy the total financial incentives on rooftop solar panels could go up to 50%.
The subsidy program is a part of the Indian government's ambitious initiative to install 20,000 MW solar energy power systems by 2022. The Jawaharlal Nehru Solar Mission, as it is called, would potentially include feed-in tariff system in the future giving the domestic users to make money by selling excess power generated to the utilities.
Feed-in tariff systems are not common in India and are yet to be in implemented on a large scale. Two companies, Tata BP Solar and New Delhi Power Limited started pilot projects setting up small-scale distributed power plants and testing feeding the power generated to the main grid.
New Delhi Power Limited then launched a feed-in tariff scheme last year but failed to attract a single customer. The company completely failed in marketing the program and none of the domestic users had absolutely no idea about the same. Lack of skilled professionals is a major issue. There are hardly any people with technical knowledge who can do micro-modeling of solar energy systems keeping in mind the individual requirements of domestic users.
Although there are many companies involved in manufacture and assembly of solar panels the demand in domestic market is very low. These companies therefore export most of the solar panels abroad. Demand in domestic market has been low due to lack of knowledge about the technology and lack of financial incentives for photovoltaics.
The government does provide subsidies for solar water heaters and many homeowners, hotels and other commercial buildings have installed solar water heaters. However, there are no such subsidies for photovoltaics in most states. Solar photovoltaics are seen as expensive, less efficient technology investment in which does not bring healthy and quick returns.
If the Indian government wants to achieve the massive goal of install 20,000 MW solar photovoltaics by 2022 it needs to act swiftly on certain essential issues. One, it needs to stimulate and support research and development in solar photovoltaics — for this the government has set up the Solar Energy Center. R & D in the industrial sector results in swifter development of affordable technology and thus financial support for research activities must be provided.
Second, the government should set up training centers for installation, maintenance and repair of solar energy systems this would not only address the issue of lack of skilled professionals to drive the solar energy revolution but would also create hundreds of thousands of jobs. And third, government should take up marketing of such programs aggressively. Mere subsidies would not encourage the consumers install solar panels on their rooftops. The consumers needs to know why is it important for him and his business, how it will help the country and its energy needs. The consumer needs to be explained how long would be the payback period and how much will he be able to save on the utility bill.
The views presented in the above article are author’s personal views and do not represent those of TERI/TERI University where the author is currently pursuing a Master’s degree.