Hyderabad: While the AP government has targeted to achieve 9,150 MW capacity of renewable energy by 2018-19, top experts of the country have cautioned of investment fluctuations and a slowing solar market of India.
Though the Centre has come forward to fund AP’s plan, private investors are not showing interest due to policy and financing reasons for the solar and wind energy sector in the country including in AP.
Reluctance of domestic banks to lend money, lack of renewable purchase obligation by state power utilities and frequent changes in proposed incentives are resulting in slowing of the sector, say experts.
Experts suggest that existing financing of solar and wind power needs long-term certainty, subsidies and tax relief for generating renewable electricity.
According to experts, clean energy investments in the country in 2013 was the lowest since 2010 at Rs 34,713 crore.
Interestingly, AP is not among the top five renewable energy states in the country. Around 70 per cent of renewable energy is from five states including Tamil Nadu, Maharashtra, Gujarat, Rajasthan and Karnataka.
CEO of Council on Energy, Environment and Water, Dr Arunabha Ghosh said, “Despite nearly doubling the installed solar capacity in 2013 to over 2.5 Giga Watt, India’s solar market is slowing.”
Expert have advised the states to for “green bonds”, which are effectively used in international markets to stimulate solar market growth.
“Strong government support is critical to boost investors’ confidence to provide payment security for solar contracts. Innovative state programmes like AP’s exemptions shall be considered by all states,” said Mr Ghosh.
“Medium-to-long term innovative financing schemes should be attempted including a green bank and green bonds. There should be complete phase out of fossil fuel by 2051,” said Ms Ritu Mathur of TERI University.
