National Solar mission going slow…

The MNRE has released draft policy of phase 2 National solar mission on December 2012. The ministry conducted various consultative meetings with various stakeholder groups, hoping to be able to launch the program in February of this year. As of September, there is still no final policy document.

In a related disappointment, as of February, the MNRE stopped accepting applications for the 30% subsidy it offered to all rooftop and off-grid power projects, too. And, it is not yet clear as to when this window will reopen. MNRE also stopped the new channel partner empanelment.

The second phase of the National Solar Mission, which was targeted to achieve installations of almost 4 GW of solar power projects under a federal scheme, and 6 GWs under state schemes, has not yet taken off. The second phase of the solar mission surely will take a hit as its most critical component is viability gap funding - a direct subsidy to cover the cost of a solar power project up to 33%. The cost of the subsidy may well go up to $1.5 billion - something that the nation's treasury certainly will not allow in the current scenario of deficit.

The August Renewable Energy Certificate (REC) trading session of the current financial year witnessed low demand again. The supply is far exceeded the demand.

Trading on the Indian Energy Exchange (IEX)  featured 31,101 non-solar trades and 1,754 solar RECs.

For the non-solar RECs, buy bids of 31,101 and sell bids of 18,72,449 were received. Of this, 31,101 were cleared at Rs 1,500 per REC, IEX said in a statement. For solar RECs, buy bids of 1,754 and sell bids of 23,338 were received, against which 1,754 were cleared at Rs 9,300 per REC.

This trading session featured 736 market participants, of which 601 participated in the non-solar segment while 135 participated in the solar segment.

Overall there are 1,927 participants registered in the REC segment at IEX. Of these, 486 are eligible entities (renewable energy generators), 1,428 obligated entities (Discoms, open access consumers and captive generators) and 13 are registered as voluntary entities.

Absence of any such program, devaluation of the local currency, non-enforcement of solar power purchase obligations and the slow sale of renewable energy certificates will significantly impact the country's solar power sector and various stakeholders.

The rising cost and lack of generating capacity of conventional power offer some solace to the solar sector, which may hope that consumers will eventually adopt solar power in India that is blessed by the sun for over 300 days per year.