Solar power utility sector in india: Challenges and opportunities

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Renewable and Sustainable Energy Reviews journal homepage: www.elsevier.com/locate/rser

Solar power utility sector in india: Challenges and opportunities ⁎

Pushpendra Kumar Singh Rathorea, , Shailendra Rathoreb, Rudra Pratap Singha, Sugandha Agnihotric a b c

Gla University, 17 km Milestone, Mathura-Delhi Highway, Mathura 281406, UP, India Inverstis University, Bareilly-Lucknow Highway, Bareilly 243001, UP, India Kit, Kanpur-Allahbad Highway, Rooma, Kanpur 208001, UP, India

A R T I C L E I N F O

A BS T RAC T

Keywords: Solar Energy Power India

In the last decade the demand of power in India has increased manifold, therefore Government has announced the National Solar Mission of generating 100 GW of solar power up to 2022. Around 60% of the total National Solar Mission target is allotted to the national/international large-scale solar power developers/investors. Hence, it becomes important to know the ground reality of large-scale solar PV developers/investors. This paper deeply analyzes the key barriers and bottlenecks faced by solar power developers in achieving the target and their growth. This article also suggests some motivational factors of solar energy which play an important role in attracting large solar players around the world to invest in Indian subcontinent. It concludes by highlighting some key policies of the Government that can help in addressing some identified barriers in order to ensure a secured sustainable energy future of India.

1. Introduction The demand for energy in India is rapidly increasing with increasing human population, urbanization and modernization. One estimate suggests that the world population is expected to double by the middle of this century [1]. Most of the population increase will take place in developing countries like India, Brazil and China. Being a developing nation and ranked 2nd in terms of population, India's power appetite is increasing at an alarming rate. In the last 10 years, in India, the generation capacity has been doubled and at present it is around 260 GW [2]. This rapid capacity addition is insufficient to meet the power demand of the country. Further, for sustainable development our power generation must touch the figure of 300 GW and 800 GW up to 2017 and 2035 respectively [3]. India is still not able to meet its peak electricity demand despite of the fact, that in 65 years the installed capacity has been increased by more than 113 times. According to the report published by Central Electricity Authority in 2015, the peak power deficit in 2001-02 was 12.1% and at the end of 2014-15 it was reduced to 2.5%. Fig. 1 shows the gap between demand and supply of power in India in 2014-15. To overcome this situation, planned and unplanned measures were undertaken by the government and utilities to bridge this demand-supply gap. Fig. 2 shows the growth of capacity addition of power sector in the last 10 years in India. No doubt that this capacity addition has reduced the power deficit, but it leads to the emission of greenhouse gasses which affects the climate adversely. ⁎

Today, India heavily relies on fossil fuel to meet its energy requirements. Around 69.5% of the total power is generated by thermal power plants [4]. In India electricity generated by burning fossil fuels contributes 37.8% of the total greenhouse gasses released in the atmosphere [5]. Burning of fossil fuels increases carbon-dioxide emission which is a major contributor to the climate change crises today [6]. In 2016, World Health Organization (WHO) has released a report in which, 11 Indian cities have occupied positions in the list of top 25 polluted cities of the world [7]. This shows that, increase in installed capacity of fossil fuel based power plants also increases the pollution level. For India to sustain strong economic growth, a significant growth in its electricity consumption is inevitable, which also does not create any harmful effect to the environment. Renewable energy sources are capable to solve the problem of sustainable development associated with fossil fuel based power plants as these energy sources are unlimited, ecofriendly and provides energy with negligible emissions of air pollutant and greenhouse gases [8]. It is clearly feasible to replace the current fossil fuel infrastructure with solar power and other renewable, and reduce CO2 emissions to a level commensurate with the most aggressive climate change goal [9]. Being a tropical country and having around 300 sunny days/year, India's theoretically calculated solar energy incidence on its land area alone, is about 5000 trillion kilowatt-hours (kWh) per year (or 5 Wh/yr) [10]. To utilize this much of solar energy the government has set an ambitious target of achieving 100 GW of solar power till 2022 under Jawaharlal Nehru National Solar Mission (JNNSM). Since its

Corresponding author. E-mail address: [email protected] (P.K.S. Rathore).

http://dx.doi.org/10.1016/j.rser.2017.06.077 Received 19 September 2016; Received in revised form 22 March 2017; Accepted 22 June 2017 1364-0321/ © 2017 Elsevier Ltd. All rights reserved.

Please cite this article as: Rathore, P.K.S., Renewable and Sustainable Energy Reviews (2017), http://dx.doi.org/10.1016/j.rser.2017.06.077

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from various sources, which are then analyzed for better understanding of the problem and suggesting solutions or solution approaches. One of such tools is an exploratory research tool. Exploratory research often relies on qualitative approaches such as: case studies, in-depth interviews, pilot studies, and focus groups [12]. Exploratory research tends to tackle new problems on which little or no previous research has been done. This research article deeply analyses the already published statistical reports of various Governments/private organizations of National and International repute, which are directly or indirectly associated with the growth and development of large scale solar utilities in India, to analyze the condition of the solar energy market of India for large solar utilities. During the course of study, the study team has interacted with key Government officials, the domain experts in affiliated technical and academic institutions and independent research organizations to gain perspectives of all relevant stakeholders in context with the opportunities and growth of the large solar power sector in India. In order to get more insight of the solar utility sector of India, fifteen large scale solar power developers were interviewed regarding the challenges they have faced in the Indian subcontinent, with specific focus on the constraints related to technology, financing, policies and regulations, infrastructure, and transparency and accountability.

Fig. 1. Peak power deficit of India in the year 2014 and 2015. Sources: Central Electricity Authority, 2015.

3. Motivational factors for solar power sector in India In this section we have discussed about various motivational factors that affects the growth and development of the solar power sector in India. These factors will play a major role in framing the future of the solar market in India and will definitely attract the global solar industry for investing in Indian subcontinent.

Fig. 2. Installed capacity of the various power sectors from 2005 to 2015. Sources: Indian central statistics office, National statistical organization, 2015.

3.1. Availability of solar energy

inception, the JNNSM has seen a very slow progress in terms of installed capacity because till March 2016 the total cumulative installed capacity of the utility scale solar power projects in India is only 8118 MW [11]. But, if we see the thermal power capacity addition of the last 2 years, then it is more than the cumulative installed capacity of the solar utility sector in India [2]. Whereas, countries like China, Japan and USA has 43.53 GW, 34.41 GW and 25.62 GW of solar Power installed capacity respectively. The slow growth of the solar utility sector in India is a matter of concern because about 60% of the total target of JNNSM is allotted to solar utility sector. Now one can imagine the actual condition of the solar utility sector in India. Why this utility scale solar power sector is not growing as per the said target? Is it policy and regulatory barriers or technological barriers. Therefore, this research article is an attempt to deeply analyze various ground barriers and bottlenecks faced by the utility scale solar power developers in India. In this study, the point of view of 15 solar power developers has been taken into consideration in compiling various types of barriers faced by the developers. The author had also addressed and analyzes some motivational factors, for the solar power developers, which are associated with the Indian subcontinent. These factors will play a major role in attracting investment of the solar industry and makes India to move on the path of sustainable development by becoming one of the leading nations in solar energy especially for the growth and development of large solar power projects. In order to develop India as a hub of solar power and to achieve energy security the Government had taken various short term and long term initiatives which affects the growth and development of large scale solar power sector are also clearly mentioned in this article. At the end, the author has also shown the current status of the solar utility sector in India.

The lifeline for any type of solar power establishment is the availability of solar radiation. The geographical extent of India lies between 8°4′ to 37°6′ north latitude and 68°7′ to 97°25' east longitude and it is the 7th largest country in the world, having landmass of 2.9 million Km2 and hence the solar profile of India is very rich. Fig. 3 shows the annual average direct normal irradiance in most of the Indian states are around 4.5–5.0 KWh/m2/Day and Fig. 4 shows that average global horizontal irradiance is around 5.0–5.5 KWh/m2/Day. This much of solar energy is sufficient to produce 6,081,709 TWh/year, which puts India in the list of top five countries of the world [13]. It has been found, after analyzing these figures, that there are many regions which receive solar insulation of more than 5 kWh/m2/day and therefore, these regions can constitutes solar hotspots in India. Western Ghats, Eastern Ghats, Gangetic plains, Thar deserts and Gujarat plains can be the solar hotspots in India covering around 1.89 million km2 of area (~ 58% of the total land mass) [14]. 3.2. Availability of wasteland In evaluating the environmental impact and capital cost the amount of land area required for a particular amount of utility scale power generation, referred as solar land use energy intensity, is considered as an important parameter. A solar utility scale solar power plant has large land use energy intensity as compared to fossil based power plant [15]. For setting up a solar power plant of more than 20 MWac capacity around 7.9 Acres/MW of total land area is required [16]. There is ample amount of wasteland available in the Indian subcontinent, and can be used for installation and development of utility scale solar power plant. Developing a utility scale solar power plant on wasteland doesn’t create any environmental pressure on agricultural systems because wasteland is neither fit for residential purpose nor for any type of agriculture purpose. Due to

2. Methodology This article discusses the barriers and opportunities faced by the solar utility sector in India. It uses certain tools for data collection 2

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Fig. 3. Direct Normal Irradiance – Annual Average. Source: National Renewable Energy Laboratory, U.S Department of Energy.

3.3. Minimum dependenacy of solar instalations on external cost

scarcity of wasteland many Mediterranean countries are facing excessive environmental pressure on their cropping system due to ground mounted photovoltaic installations [17]. The National Remote Sensing Centre has prepared a wasteland atlas of India and by analyzing that atlas it has been found that around 46.7 million hectares of wasteland are available in India which is shown in Fig. 5 [18]. Aggregation of land may be an execution challenge, but we are not considering that as a limiting factor to calculate the theoretical potential. Moreover, even the wasteland availability in India is significant.

Another advantage for solar power developers in setting up a large utility scale solar power plant is that, in India the effect of external costs (installation time, fuel supply risk, water consumption, pollution and currency exchange rate) in solar power generation is minimum as compared to conventional power sources. Table 1 attempts to tabulate the average cost of various types of electricity generation and to quantify some of the external costs. Some forms of power generation have very significant external costs to the community and the economy but solar power has more merits in comparison to other sources of power. 3

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Fig. 4. Global Horizontal Irradiance – Annual Average. Source: National Renewable Energy Laboratory, U.S Department of Energy.

solar power developers in India. As of 2016, Ministry of New and Renewable Energy had released a list of around 500 channel partners for solar PV division [21].

Also the solar costs have fallen rapidly around the world and so in India between 2011 and 2014, as cells and other components have become more efficient and production costs have fallen as a result of learning, competition, innovation and scale. Therefore, in some places of the world levelized cost of energy (LCOE) of large scale solar power plant is at par compared with new power plant of same size being set up with imported coal [19,20]. With the announcement of the Jawaharlal Nehru National Solar Mission (JNNSM) by the Government of India on 23rd November 2009 there arises a hope of growth and development for all the large scale

4. Barriers for large scale solar developers in India Solar power capacity addition and development of the solar sector suffers on account of a number of constraints, overlaps and gaps prevalent in the current policy and regulatory environment. This section describes five most critical barriers, technological barriers, 4

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Fig. 5. Wasteland Map of India. Sources: National Remote Sensing Centre, Indian Space Research Organization, Govt. of India.

policy and regulatory barriers, financing barriers, transparency & accountability and infrastructure barriers, which affects the transition to solar power development in India.

performance of this technology in Indian subcontinent is still unknown. 9 out of 15 solar power developers, who were interviewed, agreed that the primary technological barrier is lack of R & D and manufacturing facilities for setting up large scale solar power plant. India is trying to increase manufacturing facilities and R & D facilities of solar in last ten years but, due to lack of policies, lack of awareness, poor quality, lack of financial support have undermined this effort. Almost every developed country and most of the developing countries are investing in R & D in solar energy and setting up large manu-

4.1. Technological barriers In the Indian subcontinent the solar technology is quite new and therefore the risks associated with this technology are high. In some countries the solar technology is matured, but the evaluation & Table 1 An all in cost comparison of wholesale electricity sources in India. Sources: Institute of Energy Economics and Financial Analysis Fuel source

Capital cost (US$m/MW)

Install time

Fuel supply risk

Wholesale price INR/KWh

Air pollution

Inflationary impact

Coal fired domestic Coal fired Imported Diesel fired Gas fired domestic Gas fired imported Nuclear Hydro large scale Hydro small scale Wind Solar PV

0.8−0.9 0.8 − 1.0 0.8 − 0.9 0.7 0.7 2.3 1.3 1.2 1.0 1.0.1.3

4.5 4.5 3.4 4.5 4.5 5.10 5.15 4.5 1.5.2 1

Medium High High High Medium High Zero Zero Zero Zero

3.5 5.6 12.15 5 6.8 N/A 3.4 3.5 4.5 5.6

Extreme Extreme Extreme High High Nil Low Nil Nil Nil

Low Upward Upward Low Upward Upward Down Down Down Down

5

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4.2. Policy and regulatory barriers

Table 2 Comparitive chart of Government support to solar manufacturing units. Sources: Energetica India, KMPG Report Country

Low interest loans

R&D support

Capital subsidies

Subsidized utilities

Support in acquiring land

China India USA Taiwan Malaysia

Yes – Yes Yes Yes

Yes – Yes Yes –

Yes Yes Yes Yes –

Yes – – Yes Yes

Yes – Yes Yes Yes

9 of the 15 developers, who was interviewed on policy parameters like short listing of new projects, minimum and maximum capacity of the project, equity to be held by promoters, role of state level agencies, scope of guidelines etc., suggest that there is no single comprehensive policy statement for solar energy in the country. Policies have been issued as and when necessary to facilitate the growth of solar power. There are many major issues which the developers specifically mentioned. The first and the biggest issue that all the solar developers faced is that, the Renewable Purchase Obligation (RPO) is not legally enforceable at the federal level as well as at the state level. A review of the RPO determined by different State Electricity Regulatory Commissions (SERCs) indicates that there are differences in the definition of the framework for RPO. Developers think that there must be common RPO for all the SERCs. For example, renewable energy legislation is in place in more than half of the 50 American states, and the recent WaxmanMarkey climate change bill even contained a national RPO of 20% 2020. Such policies must be implemented in India also. Another issue is that of the level of RPO. The level of RPO has to be carefully determined by SERCs. While a high RPO target would incentivize distribution companies (DISCOM) to purchase more solar power, thereby encouraging investments, such targets may be ambitious in the short term. On the other hand a low target may put a restriction on the amount of energy purchased by distribution companies from solar power utilities. About 80% developers told that there is a very tedious and time taking process to obtain subsidies [23] and the presence of multiple institution like, Ministry of New and Renewable Energy(MNRE), Central Electricity Regulatory Commission (CERC), Ministry of Power and State Electricity Regulatory Commission (SERC), makes legal formalities a cumbersome task. More than 60% of the developers suggest that the criterion of selecting the developers for National Solar Mission is not accurate. It should be on the basis of track record and financial condition of the developer rather than the maximum & minimum capacity per developer. The developer which has a good track record of setting up power plant must be given more MW to set up. Remaining 40% developers were new and don’t have any past experience. All the developers who were interviewed suggest that the solar power tariff bidding process is not a successful step at this early stage. In the tariff bidding process the Federal or State Government agencies invite tenders from solar power developers for selling the solar power at a minimum price. Among all the tenders which are received, the solar power developer which quoted the minimum price either on power capacity terms (MW) or energy quantity terms (Kwh), is selected for the development of particular solar power plant. The reason they have told that, if the developer who win the bidding process will get the control over the development of power plant and would use low quality of equipments in order to save capital. This will definitely affect the performance of the solar power plant. About 55% of the developers were in the opinion that site specific tariff must be considered by the Central Electricity Regulatory Commission (CERC). The reason they have quoted that, the amount of solar radiation differs from region to region. In India states like Gujarat and Rajasthan receives the highest amount of solar radiation and hence high Plant Load Factors (PLFs) can be achieved. On the other hand, states like Punjab, Haryana, Bihar, Madhya Pradesh and Maharashtra receives comparatively less solar radiation and hence PLF will also be low. Therefore, states which receive high amount of solar radiation must have a high solar tariff, which is to be compensated by having lower tariff in the states which receives the lowest amount of solar radiation. Otherwise, all the development related to solar power will remain concentrated in only these two states. A summary of a few good practices while formulating solar policies at the federal level, as per National Renewable Energy Laboratory, has been shown in Table 3.

facturing facilities for the growth and development of the solar power sector. According to the Ministry of New and Renewable Energy (MNRE), in the year 2016, India's cell and module manufacturing capacity now stand at 1212 MW and 5620 MW respectively, whereas countries like USA, China, Germany, Malaysia etc. are capable of multi-giga watt production. Data released by the government suggests that the average size of the Indian solar cell and module manufacturing unit is just about 86 MW and 69 MW respectively per annum. In comparison, module production capacity of Trina Solar, a Chinese manufacturer is expected to surpass 6 GW by the end of this year, higher than all 81 Indian module manufacturers put together. One of the oldest solar manufacturer, Moser Baer solar, is facing continuous loss and low capacity utilization rates, which highlights India's many failures to success. Table 2 shows a comparative analysis of government support to solar manufacturing industry in various countries. A survey carried out by India's Ministry of Commerce & Industry in 2016, points to the current sorry state of PV manufacturing in India when comparing nameplate capacity to actual capacity in operation. In existence, according to the survey are approximately 15 companies with cell manufacturing equipment and 48 with module equipment. Those from the survey that had both types of equipment totaled 12. In total 53 PV manufacturers were said to have existed in India. Six of the 15 companies with cell equipment had completely idled production, while 14 companies with module equipment had idled production. Companies that had no current production of either cells or modules totaled 15. Thus, India depends on foreign suppliers and foreign solar market to meet the solar PV requirement. Around 60% of the developers think that lack of availability of solar radiation data is another major technical barrier. In India the performance factor of large scale solar power plants is site specific and revenues directly correlate with the information on the incidence of solar radiation, which are not available in short intervals in a consistent manner. The right choice of technology and the determination of viability and size of solar PV projects rely on data on Global Horizontal Incidence (GHI) [22]. Policy formulation requires annual information with high accuracy and currently this information is made available. However, the project planning phase needs seasonal and monthly information. Subsequent to this phase, project development, feasibility assessment of the project and its designing require monthly, daily and even hourly data with a high confidence interval. Also, most meteorological data received is city based, though the project sites are often located in remote, rural areas. 20% developers think that they have sufficient data, but there is a high margin of error in the available data (as high as 10%) and this turns out to be a severe setback in, accurate estimation of future power generation. Remaining 20% developers generally use satellitemodeled data (which can be used only with 70–80% confidence level) of the National Aeronautics and Space Administration (NASA), National Renewable Energy Laboratory (NREL) or appoint external agencies to measure on-ground data. Due to incongruities in this type of data, the dispatch of recently developed projects has been below projections. 6

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the DISCOMs and hence the financial health of these companies plays a decisive role in the lending decisions of the financial institutions. At present, almost all of the off-taker and payment hazards are linked with the poor financial state of DISCOMs and a lack of long term policy clarity [27]. The fourth barrier under this category is the time of financial closure. The JNNSM had initially outlined a stipulated time period of three months for achieving financial closure after signing the PPA. This clause was made even more stringent by stating that the performance guarantee of US $100,000 per MW would be invoked if a developer fails to finance projects within this specified time.

Table 3 Summary of good practices for solar power deployment. Sources: National Renewable Energy Laboratory, U.S Department of Energy Policy Renewable power guidelines

Auction/Tendering process

Interconnection standards

Support private investment

Feed-in tariffs and net metering

Good practice and Comprehensive policy • Consistent Solar specific REC (Renewable energy • certificate) project size, location and land • Considering use the project size • Considering policy costs • Minimizing participation of the developers • Facilitating the developer experience and • Considering technical capability a standardized interconnection • Designing policy comprehensive policy coverage • Ensuring appropriate capacity limits • Setting administrative and application cost • Reducing projects • Demonstrating risk • Reducing soft costs • Reducing lending institutions • Training solar FIT to high level solar targets • Linking and a strong policy framework implementation at ground level • Proper • Designing appropriate billing approach

4.4. Transparency and accountability Transparency and accountability are key principles for good governance, while good governance is pre-condition to achieving sustainable development. In 2005, India was ranked 76th in Transparency International's Corruption Perceptions Index and the main causes of corruption are excessive regulations, complicated taxes and licensing systems, numerous government departments, each with opaque bureaucracy and discretionary powers, monopoly by government controlled institutions on certain goods and services delivery and the lack of transparent laws and processes. Major source of corruption in India occurs in spending money in Government schemes and programs and therefore the growth of large scale solar power is moving at a very slow rate. About 28% of the developers have agreed that directly or indirectly they are forced to pay bribe starting from the contract stage till the completion of the project. They are also in the favor that there is no transparency in issuing contracts to the developers and in land acquisition. Even the disbursal of the National Clean Energy Fund (NCEF) and its operational modalities has some issues with respect to transparency. The NCEF has been operating since financial year 2010–11and has been conceived of as a separate non-lapsable corpus to support research and innovative projects in the field of clean energy technology of which, major portion will be utilized in solar PV. The fund is created through the levy of a clean energy cess on both domestic and imported coal (Rs 50 per tonne). It is being administered by the Ministry of Finance. The fund has been largely criticized for inconsistencies between the stated objectives, operational guidelines, and final approval of the projects. It has been found that instead of funding cutting-edge R & D on clean technology, it is being used to cover the budgetary shortfalls for projects implemented by various ministries and departments. Another example of poor transparency has been identified in the state of Rajasthan where under National Solar Mission seven associate companies of a private company named as LANCO were granted commissioning certificates of a 5 MW solar power project by the Rajasthan Renewable Energy Corporation Limited (RRECL). However, it has been found that the certificate was granted even before the plant was completed, in direct violation of the guidelines of NSM [28]. 70% of the solar power developers think that it's difficult to do business in India as compared to many other countries and they will give less priority for investment in India. According to them 60% of the total duration of the solar project is used in taking approvals, grants, inspection, and land acquisition. According to the World Bank report India ranked 130 in ease of doing business index among 185 countries. Thus, there is a very big scope of improvement in order to provide a conducive environment for large scale solar power developers.

4.3. Financing barriers Like any other nation, commercial banks constitute a major source of financing for infrastructure projects, including renewable in India. Since the solar power technology is new in India and doesn’t have any proven track record as like conventional power projects, thus lack of awareness and familiarity makes it next to impossible to obtain any financial help from banks. First financing barrier for utility scale solar power developers in India is raising debt finance. Though access to affordable capital is essential to any energy project, it becomes even more essential for solar PV as the largest portion of the lifetime cost of such a project is of its capital expenditure. The capital cost estimated by the Central Electricity Regulatory Commission (CERC) for solar PV projects is Rs. 691 Lakhs/ MW for the FY 2014-15 (CERC, 2014) implying that the solar projects require a high investment up front and would have longer payback periods. Also, there are structural challenges curbing the investment of Indian banks in the solar sector. Due to large amounts of credit already extended towards the power sector (mainly thermal power plants), banks have stretched their respective exposure limits (FICCI Solar Financing Subgroup, 2013). Hence, the renewable energy sector faces a credit crunch. Apart from this the rate of interest for any renewable energy project in India are more than 10% [24], whereas the rate of interest for the loan in other sectors like infrastructure and real estate are much lower, due to which project become uneconomical. Our financial modeling of the actual renewable energy project in India and elsewhere indicates that the higher cost and inferior terms of debt in India may raise the cost of renewable energy by 24–32% compared to similar projects financed in Europe and USA [25]. A second barrier is the non availability of non-recourse financing, referred as a loan where the lender is only entitled to repayment from the profit of the project and not from other assets of the borrower, for solar power development. Currently it is almost non-existent in India despite infrastructure projects being technically eligible for the same. Most of the developers in the country work with either full or limited recourse funding, which increases the financial risk of the developer manifold [26]. The third barrier is the cash-strapped situation of large scale solar utility sector in India is because of poor bankability of Power Purchase Agreement (PPA). Most PPAs under State solar policies are signed with

4.5. Infrastructure barriers All the solar power developers have specifically mentioned the land acquisition process as the first barrier under the category of Infrastructure barriers. Land acquisition in India is governed by the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (LARR). Most of the 7

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25% of the total output in Indian subcontinent [2]. The major reason, as per solar developers, for AT & C losses in India is power theft and poor billing arrangement.

developers think that land acquisition in India is a very critical job and the legal process of land acquisition differs from state to state. A minimum of 6–12 months of time is required to acquire land and sometimes it may take more than one year. At present, in India, the land owners are directly involved in the acquisition process of their land for any type of solar power and wind power projects. Acquiring land, in India, for power project development is a very cumbersome process and requires lots of clearance from various departments like forest department, National Green Tribunal (NGT), ministry of rural development, etc. There are many examples where projects has been delayed or even moved to some other locations due to difficulties in land acquisition. Apart from this, according to Resettlement and Rehabilitation (R & R) Policy, 2007, it is the responsibility of the developer to provide compensation to the displaced communities and thus increases the financial burden on the developers. Developers told that even after allotment of land there are many approvals that have to be collected before setting up a solar power plant in India. Some of these approvals are:

5. Government initiatives This section depicts various initiatives taken by the Government for the growth and development of large solar power sector in India. These initiatives will definitely attract national/international developers to invest in solar power market in India and will provide a conducive environment to proliferate. 5.1. Jawaharlal Nehru National solar mission (JNNSM) The first major step towards solar power development is the announcement of Jawaharlal Nehru National Solar Mission (JNNSM). With this India had excited the interests of all the technology providers in the World. The JNNSM under the National Action Plan on Climate Change (NAPCC) was launched in 2010 with the objective of achieving grid parity by the year 2022. It aimed at the deployment of 20,000 MW of grid connected and 2000 MW of off-grid solar power during the three phases of its operational period. However, given the progress that has been achieved thus far in the form of gridinteractive power (3382.78 MW) and off-grid/captive power (227.12 MW), the Federal Government has raised the target of the JNNSM to 100 GW to be achieved through grid connected projects, offgrid projects and solar parks by 2022 [31]. The target for large scale solar power plant is proposed to be kept at 600,00 MW under JNNSM. The year wise targets to be achieved to accomplish the scale-up target of large scale solar power plant of 600,00 MW is shown in Table 4.

1. 2. 3. 4.

Approval from land usage authorities. Approval from state pollution control board. Approval from ministry of environment. Approval from local authorities like district Magistrate, Panchayats etc. 5. No-objection certificate from energy department Sometimes the allotted land is not well connected with road or even railways and thus transportation of solar panels is very difficult and sometimes panel breaks or falls apart in transportation, or suffer delays and damage from natural disaster. In some cases the land allotted to the developers is prone to natural disaster like flood, earthquake and landslides. These natural disasters occur very frequently in Indian subcontinent [29] and leads to collateral damage of man, machine and material. Almost 60% of the solar power developer agreed that the availability of evacuation infrastructure and grid integration is one of the major problems affecting the development of large scale solar power projects. The remote areas suitable for building such projects are typically far away from load centers. Therefore, there is a need for new power evacuation infrastructure, including transmission lines. The transmission lines would be built exclusively to carry the power generated from these plants and would be expensive. The infrastructure facilities which are provided to the developer by the state government for evacuation are inadequate and insufficient and therefore developer has to invest in setting up evacuation facilities, otherwise, it will lead to scaling down of solar power projects. All the solar power developers have mentioned that, Transmission & Distribution losses and Aggregate Technical & Commercial losses are also one of the infrastructure barriers for centralized solar utility sector. India has highest T & D losses among various developing and developed countries. In 2013 the T & D losses are more than 18% in India whereas in China and USA the losses are 6% only respectively [30]. The major reason for T & D losses, mentioned by the solar developers, is old and insufficient distribution and transmission network, inadequate investment in the distribution system, improper load management, haphazard growth of sub-transmission and distribution systems and high pilferage. In 2013 the AT & C losses are more than

5.2. Solar guidelines The second major initiative towards the development of large scale solar power sector is the launching of web based portal called Solar Guidelines. In order to provide rapid information and updates for the development of large scale solar power projects the Government has launched Solar Guidelines. It is a web based platform mainly designed for easier access to the information for the local and international solar power developers/investors. This initiative is taken jointly by Ministry of New and Renewable Energy and the German Ministry of Environment, nature conservation and nuclear safety. It is a webbased platform for growth and development of solar power projects in India and the main motive of these solar guidelines are to create a single window clearance system regarding policy framework, contracts, government approval and any other bottleneck formality which delays the commissioning of the power project. The first phase of this project includes all the steps required for setting up a solar power project in Rajasthan. In the second phase, the description is extended to cover 12 more states. 5.3. National tariff policy A third major initiative towards the development of solar power in India is that, the government has amended the National Tariff Policy in January 2011 to prescribe solar-specific RPO be increased from a minimum of 0.25 per cent in 2012 to 3 per cent by 2022. Central

Table 4 Year wise target and break-up of large scale solar PV. Sources: Ministry of New and Renewable Energy Resources, Government of India. Category

Solar power project

Year-wise targets (MW) 2014–15

2015–16

2016–17

2017–18

2018–19

2019–20

2020–21

2021–22

Total

3000

1800

7200

10,000

10,000

10,000

9500

8500

60,000

8

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The Government has planned to set up 25 solar parks in a span of 5 years each with an installed capacity of more than 500 MW. Some Ultra Mega Solar Power Projects may be set up in these Parks or the entire park may individually be an Ultra Mega Solar Power Project. 5.5. Solar cities The government has taken the initiatives for the development of solar cities across the country in the year 2013–2014. The Solar City aims at a minimum 10% reduction in projected demand of conventional energy at the end of five years, through a combination of enhancing supply from renewable energy sources in the city and energy efficiency measures. The objectives of the program are given below:

• • • • Fig. 6. Top 10 solar utilities project developers with the cumulative commissioned capacity in MW. Sources: Bridge to India.

To empower the local government to address the energy challenges at city level. To prepare a master plan for future demand by analyzing the current energy situation. To create awareness among people about solar energy through education and training. To involve stakeholders in the planning process.

A total of 60 cities/towns is proposed to be supported for development as Solar Cities. A city will be identified as a solar city on the basis of availability of renewable energy and population. Up to Rs. 50.00 Lakhs per city/town is provided depending upon population and initiatives decided to be taken by the City Council/ Administration.

Electricity Regulatory commission (CERC) and State Energy Regulatory Commission (SERCs) have issued various regulations, including solar RPOs, Renewable Energy Certificate (REC) framework, tariff, grid connectivity, forecasting etc. for promoting solar energy. CERC had announced the Renewable Energy Certificate scheme under which a generator gets an opportunity to earn a Renewable Energy Certificate on the generation of 1 MWh of electricity apart from the physical form of energy. The REC is a tradable and non-tangible energy commodity which ensures that 1 MWh of electricity, which is generated from renewable sources, has been injected into the main power grid. Further, the scheme has been categorized into Solar and Non-solar RECs. Till date about 746 MW of solar capacity have been accredited and 718 MW has registered under the REC scheme [32]. Almost 61,01,587 Solar REC has been issued till 2016 and 13,04,424 Solar RECs have been redeemed. The Solar RECs got traded in last 10 months only. In view of the ongoing efforts of Central and State Governments and various agencies for promoting solar energy, Ministry of New and Renewable Energy has undertaken an exercise to track and analyze the issues in fulfillment of Solar Power Purchase Obligation and implementation of Solar REC framework in India. This would help various stakeholders to understand the challenges and opportunities in the development of solar power. It would also include monitoring of Solar RPO Compliance; analyzing key issues related to the regulatory framework for solar in various states of India.

6. Current status of the utility scale solar power sector The capacity of the large/utility scale solar power projects in India has increased due to the inclusion of JNNSM in 2008. In 2015 around 2.45 GW of large solar installed capacity was anticipated, but only 2 GW was actually commissioned because of delay in projects in various states. Out of this 2 GW, 700 MW was completed under the central government, 850 MW under state government and the remaining 450 MW was under private initiatives. As of August 2016 the total capacity of commissioned solar power projects is 8118 MW and around 14,842 MW is still under the pipeline [11]. The new amendments to National Tariff Policy 2005 mandate the Renewable Purchase Obligation (RPO) to 8% by 2022 [33]. That would require around 69 GW of installed solar power. As per the current status of utility scale

5.4. Solar park Setting up Solar Park, is another major step taken by the government towards the growth and development of solar power projects. Solar Parks are concentrated zone and are dedicated only to the development of solar power projects. In single projects of few MW, high amount of capital investment is required in setting up infrastructure like transmission lines, development of the site and other necessary amenities. Scattered location of solar power projects, in India, leads to more transmission losses and more project cost per MW. These solar parks will have all types of basic amenities required for setting up a solar power project like transmission lines, land and water. For setting up solar power projects inside these Solar Parks, developer doesn’t require any type of clearance or approval from local/federal authorities. This step will definitely encourage national and international developers/investors to set up their solar power projects in India.

Fig. 7. Top 10 solar utilities project developers having projects in the pipeline in MW. Sources: Bridge to India.

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Fig. 8. Ratings of barriers.

8. Conclusion

solar power, it looks highly ambitious to achieve this target. Fig. 6 shows the cumulative commissioned capacity of top 10 solar developers in India and Fig. 7 shows the capacity of the solar projects which are going to be commissioned in the upcoming year with these top solar developers. India is far behind the countries like China and USA where the cumulative installed capacity of the solar utility sector is 26,875 MW and 16,596 respectively [34]. India has to overcome many constraints faced by large solar developers for coming in the league of top solar power producing countries.

Because of concerns such as climate change and environmental protection, energy savings and reduction of carbon emissions have been emphasized worldwide and India has also started its journey towards a sustainable future. As per World Health Organization (WHO), there are 11 Indian cities in top 25 most polluted cities of the world and the major contributors are the power sectors which uses conventional sources of energy for power generation. To grow on the path of sustainability India has to harness solar power at a very large scale because it is abundantly available and produces zero greenhouse gas emission. Availability of 300 sunny days/year, availability of ample amount of barren wasteland and low impact of external costs in solar electricity generation are few advantages which shows that Indian geographical location and market is completely in favor of growth and development of large scale solar power developers/investors both domestic and international. These motivational factors are not providing any boost to the growth of the solar utility market because of lack of policy and regulatory measures, poor infrastructure, lack of financing, insufficient technology and low transparency and accountability. These barriers to solar power cannot be unfolded in short duration, but the government is trying to pacify the issues faced by large scale solar power developers. Many new programs have been launched in the form of capacity addition, increasing percentage of RPO, providing 100% foreign direct investment, subsidize and providing a conducive environment for various joint ventures, technology transfer and MOU's. These measures will definitely attract big solar power players from across the world to develop India as a hub for solar power projects.

7. Result and discussion The international solar community sees a very big market of solar power in India but due to the lack of single comprehensive policy the growth of the solar power sector is sluggish even when there are various motivational factors like, abundant solar radiation, availability of land and low cost are available in the Indian subcontinent. Fig. 8 shows the ratings of barriers faced by the solar power developers. Around 63% of the developers interviewed stated that barriers in policy & regulatory aspects and technological aspects were the most significant barriers. Around 53% of the developers stated that along with policy barriers, the infrastructure barriers are also critical. Approximately 27% and 28% of developers viewed financing and transparency & accountability aspects of barriers as critical respectively. At international level India is facing pressure to control the greenhouse gas emission, therefore the Government of India has released Jawaharlal Nehru National Solar Mission to install 100 GW of solar power installation across the country by 2022. In order to successfully attain the target, the government has to extend support to the solar industry in the form of formulating common policy at the federal level, proper implementation of the policies at the ground root level, single window clearance system, easy and long term financing and proper infrastructure. Apart from this the Government must invest to improve R & D facilities, manufacturing facilities and Infrastructure for the growth of the solar power sector in India.

Acknowledgments We would like to thank Dr. J. Mathur and Dr. Sanjay Vashisth for having guided me throughout my research work in the field of solar and provided me enough resources for information. We would also like to thank all the solar power developers and government agencies who were the part of this research for providing me resource full information. 10

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