National Solar Mission

The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi, gave its approval for stepping up of India’s solar power capacity target under the Jawaharlal Nehru National Solar Mission (JNNSM) by five times, reaching 1,00,000 MW by 2022. The target will principally comprise of 40 GW Rooftop and 60 GW through Large and Medium Scale Grid Connected Solar Power Projects. With this ambitious target, India will become one of the largest Green Energy producers in the world, surpassing several developed countries.

The total investment in setting up 100 GW will be around Rs. 6,00,000 cr. In the first phase, the Government of India is providing Rs. 15,050 crore as capital subsidy to promote solar capacity addition in the country. This capital subsidy will be provided for Rooftop Solar projects in various cities and towns, for Viability Gap Funding (VGF) based projects to be developed through the Solar Energy Corporation of India (SECI) and for decentralized generation through small solar projects. The Ministry of New and Renewable Energy (MNRE) intends to achieve the target of 1,00,000 MW with targets under the three schemes of 19,200 MW.

Apart from this, solar power projects with investment of about Rs. 90,000 crore would be developed using Bundling mechanism with thermal power. Further investment will come from large Public Sector Undertakings and Independent Power Producers (IPPs). State Governments have also come out with State specific solar policies to promote solar capacity addition.

The Government of India may also approach bilateral and international donors as also the Green Climate Fund for achieving this target. Solar power can contribute to the long term energy security of India, and reduce dependence on fossil fuels that put a strain on foreign reserves and the ecology as well. The solar manufacturing sector will get a boost with this long term trajectory of solar capacity addition. This will help in creation of technology hubs for manufacturing. The increased manufacturing capacity and installation are expected to pave way for direct and indirect employment opportunities in both the skilled and unskilled sector.

The new solar target of 100 GW is expected to abate over 170 million tonnes of CO2 over its life cycle. This Solar Scale-up Plan has a target of 40 GW through Decentralized Solar Power Generation in the form of Grid Connected Rooftop Projects. While Decentralized Generation will stabilise the grid, it will minimise investment on power evacuation.

To facilitate such a massive target, the Prime Minister’s Office has been pushing various Ministries to initiate supporting interventions, like:-

a) incorporating changes in land use regulations and tenancy laws to facilitate aggregation and leasing of land by farmers/ developers for solar projects;

b) identification of large chunks of land for solar projects;

c) identification of large government complexes/ buildings for rooftop projects;

d) clear survey of wastelands and identification of transmission/ road infrastructure using satellite technology for locating solar parks;

e) development of power transmission network/ Green Energy Corridor;

f) setting up of exclusive parks for domestic manufacturing of solar PV modules;

g) provision of roof top solar and 10 percent renewable energy as mandatory reform under the new scheme of Ministry of Urban Development;

h) amendments in building bye-laws for mandatory provision of roof top solar for new construction or higher FAR;

i) considering infrastructure status for solar projects; raising tax free solar bonds; providing long tenor loans; making roof top solar a part of housing loan by banks/ NHB and extending IIFCL credit facility to such projects by the Department of Financial Services;

j) suitable amendments to the Electricity Act for strong enforcement of Renewable Purchase Obligation (RPO) and for providing Renewable Generation Obligation (RGO);

k) incorporating measures in Integrated Power Development Scheme (IPDS) for encouraging distribution companies and making net-metering compulsory.

Background:

JNNSM was launched in 2009 with a target for Grid Connected Solar Projects of 20,000 MW by 2022. In the last two to three years, the sector has witnessed rapid development with installed solar capacity increasing rapidly from 18 MW to about 3800 MW during 2010 - 15. The price of solar energy has come down significantly from Rs.17.90 per unit in 2010 to under Rs.7 per unit, thereby reducing the need of VGF / GBI per MW of solar power. With technology advancement and market competition, this Green Power is expected to reach grid parity by 2017-18. These developments would enable India to achieve its present target of 20,000 MW. But considering its international commitment towards Green and climate friendly growth trajectory, the Government of India has taken this path-breaking decision.