Is the Solar Mission being held hostage by a group of Adani-led solar companies?

31 January 2019
A year into office, Prime Minister Narendra Modi set ambitious targets for India’s solar power sector.
Ajit Solanki/AP
A year into office, Prime Minister Narendra Modi set ambitious targets for India’s solar power sector.
Ajit Solanki/AP

In 2010, Manmohan Singh, then the prime minister, launched the Jawaharlal Nehru National Solar Mission, or JNNSM, a central-government initiative that envisaged India as a global leader in the solar-energy sector. The mission aimed to create an enabling environment for the penetration of solar technology in the country, and set a target for India’s solar power—by 2022, the government said, India would have 20 gigawatts of installed solar capacity. In 2015, less than a year after he became the prime minister, Narendra Modi raised this goal by five times—to 100 gigawatts by 2022. Modi reiterated his commitment to solar power in 2016, when India ratified the Paris Agreement, an international convention to tackle global warming, under which India promised to cut down carbon emissions by 33–35 percent. The Modi government then initiated the International Solar Alliance, an association of 121 countries that aims to develop solar energy to cut down dependence on fossil fuels. “ISA will play a similar role in the future that Organization of the Petroleum Exporting Countries, which accounts for around 40 percent of global crude oil production, is playing today,” the prime minister said while inaugurating the first ISA assembly in October 2018.

Modi’s grandstanding aside, India’s leading role in international solar-power initiatives, as well as the JNNSM, are facing major setbacks due to recent policy changes. An August 2018 report by the global consultancy firm CRISIL noted that India was likely to miss its 2022 target by over a fifth, due to the impact of these policy changes.

In July 2018, the finance ministry approved a safeguard duty—an import duty levied to protect the domestic industry from losses due to cheap imports—on solar cells and modules, which are the main building blocks of a solar panel. Coupled with the weakening rupee, the new import duty has raised the cost of solar projects by around twenty percent, as per the CRISIL report. The duty was imposed at the behest of a group of five companies, led by Mundra Solar, the solar-power firm owned by the Adani Group. Further, despite repeated requests from the ministry of new and renewable energy, or MNRE, the finance ministry has refused to provide subsidies and incentives to domestic solar-panel producers. Put together, these decisions raise questions about the government’s commitment to becoming a solar superpower.

The JNNSM target set by the government is split into ground-mounted solar projects and rooftop solar panels, with installed capacities of 60 gigawatts and 40 gigawatts, respectively. Currently, India has achieved a total connected solar-power capacity of 24 gigawatts, against the 100-gigawatt target. Of this, around 9.3 gigawatts was added in 2017–18, but only 2.6 gigawatts was added in 2018–19. According to the MNRE, only 156 megawatts of rooftop solar panels were installed in 2018, against the target of 1 gigawatt for that year—the overall current capacity is a mere 6 percent of the 40-gigawatt aim. In May 2018, India’s solar-cell manufacturing capacity was 3 gigawatts, a bare 15 percent of the 20-gigawatt target.

The impact of recent policy decisions is already being felt as attempts to boost solar capacity through large-scale tenders have failed. Despite repeated revisions of terms and deadlines, tenders issued by the Solar Energy Corporation of India, or SECI—the central public-sector enterprise that implements the JNNSM—for 10 gigawatts in solar projects had no bidders.

Nileena MS is a reporting fellow with The Caravan. 

Keywords: Mundra Solar commerce ministry import duty Arun Jaitley Piyush Goyal MNRE Narendra Modi JNNSM imports solar power Adani Group Finance Ministry Nitin Gadkari Nirmala Sitharaman SEZ act Paris Agreement International Solar Alliance CRISIL
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