Our solar subsidy, helping US and China
Every penny we pay extra for solar power is not helping the Indian solar industry but the ones in United States and China.
The government has mandated under the Electricity Act that a certain percentage of solar power the distribution companies need to buy from renewable sources, of which solar is a major contributor.
It means that the companies pays high tariff for energy from renewable sources as compared to conventional sources such as thermal and the same gets reflected in our monthly electricity bills through tariff revisions.
The high purchase tariff for renewable mainly solar is to building Indian solar capabilities. For this, the government introduced Jawaharlal National Solar Mission with a target of generating 22,000 MW of power from solar by 2022. Instead, of Indian companies the US and China based companies are benefitting.
The US’ Exim bank and Overseas Private Investment Corporation has started offering low interests loans to Indian solar project developers with a mandatory condition that they will have to procure minimum 80 % of the equipment from US companies.
The benefit is not just that. The loan is being provided through US’ climate “fast start financing” aimed at helping the developing countries to build clean energy capabilities.
With one weapon the US is aiming at two birds. First, climate finance and second, bolstering its laagering solar industry. Not without a helping hand from the Indian government.
Delhi based advocacy group the Centre for Science and Environment (CSE) said it has happened as there is no mandatory clause under the solar mission for procuring equipment from Indian manufacturers for solar crystalline PV technology as is the case for thin-film photovoltaic technology.
The US has exploited the loophole in India’s domestic solar policy has been exploited for benefits of its industry, nothing wrong as far as US government is concerned. But, will kill Indian solar industry in a nascent stage.
In case of photovoltaic, it is not the Indian companies which had gained. Chinese have. The fact is that most of the cheap equipment is procured from China and branded as India’s domestic production. The Ministry of New and Renewable Energy has miserably failed to check this mal-practice and has, in fact, promoted it by allowing Indian companies to use cheap Chinese solar equipment.
The conclusion of three years of National Solar Mission is damp squib for Indian companies and showering gains from Chinese and US companies.