New Delhi: Even as the country has to play a major role in reducing its carbon footprint, it continues to have subsidies for commodities such as diesel, which are in a way a deterrent to the use of renewable energy in the country, especially solar energy.
In a panel discussion on creating and financing a solar future at the World Economic Forum’s India Economic Summit in New Delhi on Tuesday, it emerged that while the government is taking enough measures to encourage investments in this sector, it needs to have a robust policy framework around it which is in tune with ground-level realities.
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Deepak Puri, chairman and managing director of Moser Baer India Ltd, one of the key companies in the country’s solar photovoltaic industry, applauded the government for its efforts in this space so far by talking about the initiatives of the ministry of new and renewable energy and the department of information technology’s semiconductor policy.
Member of Parliament N.K. Singh pushed for the off-grid model, in which producers of solar power do not have to transmit it through the state electricity boards to reduce regulatory hurdles.
“There has to be a comprehensive solar legislation and more coordination between the states and the centre on the issue,” he said.
Geraint Hughes, managing partner, South and Southeast Asian practice at law firm Clifford Chance, illustrated the issue with numbers.
He said the world needs $70-160 billion of capital expenditure in this space by 2020 to generate 300MW of solar power.
“If you consider renewable energy as a whole, the investment needed is of over $10 trillion,” he said.
Harish Hande, managing director of Solar Electric Light Co., or Selco, was of the view that there is a huge disconnect between the current policy regime in the country and what is required at the ground level.
As an example he said the country continues to give a huge subsidy on diesel. “I am not saying that the subsidy should be done away with, but part of this could be directed for solar energy,” he said.
Singh added that policy makers have to decide whether to extend the subsidy to end users to encourage consumption of solar power or to select individuals instrumental in power generation.
The discussion also focused on how a lot of funding is required for such projects and how cheap and easy financing could go a long way towards encouraging the sector.