New Delhi, 15 March (G’nY News service): The Ministry of New and Renewable Energy (MNRE), responsible for promoting use of renewable energy has been caught on the wrong foot. It is surprising that a resource starvedindustry is happy with the slashing of a subsidy scheme by half, which was put in placeto boost the industry.
The government is struggling hard to pay up subsidy bills for fertilisers, food for public distribution system and until recently for petroleum. However, the announcement in the 2015 Union Budget for reduction in the roof-top solar subsidy scheme from 30 to 15 percent on the capital expenditure has brought cheers to the industry.
“The ministry has proposed to reduce the subsidy on rooftop solar power plants to 15 per cent from the present level of 30 per cent due to decline in the price of solar panels and limited availability of funds among other things,” Power Minister Piyush Goyal said on the 9th of March, 2015 in a written reply to Rajya Sabha.
The rooftop subsidy schemehas long been criticized of being detrimental to the development of the renewable energy sector in India. “The rooftop subsidy scheme stifles the development of this market by creating an expectation among power consumers that often cannot be met”, said Bridge to India, a consulting firm on RE, in November 2014, and recommended that the MNRE completely remove the subsidy on rooftop solar projects all together. They further add that the funds should then be allocated to more accessible areas of the sector or to expand the Solar Energy Corporation of India’s rooftop scheme.
It is amazing that nobody, neither the industry, nor the opposition, deemed it fit to asked the MNRE that why the subsidy scheme was not implemented and monitored adequately. Why the subsidies meant for end-users did not reach them. After all it was tax-payers’ hard earned money which should have been utilised for the purpose it was meant.Also, with the prices of solar equipment falling, it makes little sense that the Minister feels it fit to reduce the subsidy by half.
(Photo courtesy: http://www.hhvsolar.com/)
In our talk with Mr. Shubham Sandeep, director and co-founder of Aeon Solaris, his comment “reducing or removing subsidies will give private companies a level playing field” revealed the sorry state of affairs as far as the management of the subsidy was concerned.
It is a common knowledge that lack of management on the part of MNRE delayed subsidy reimbursement to the consumers and around 1600 crores as of June 2014 remained unpaid to the stakeholders. This has clearly demotivated people. One of the most important reasons for mismanagement may be attributable to the fact that scientists in the MNRE have been asked to handle administrative jobs, instead of research, which is their prime mandate.
In this scenario, therevised target of renewable energy capacity to 1,75,000 MW till 2022, comprising 100,000 MW solar energy, looks like an ambitious goal by any standards. Moreover, the MNRE needs to introspect to fix the responsibility for the failure of the subsidy scheme.