Transmission & RPO Issues: Hurdles for Indian Solar Energy Growth

India has shown an aggressive move towards solar energy implementation, and recent capacity additions that nearly doubled in recent years (5 GW in 2015- 10 GW in 2016- ~22 GW in 2018) testify the country’s intent. The growth trajectory is undeniable indeed, but there have been challenges. Transmission & RPO issues can be considered as major hurdles that slow down the adoption rate of solar power by failing to introduce green energy to the grid.

Electricity Transmission Issues: A Hurdle

Regardless of the solar panels installation growth, without a capable energy transmission system, the energy/electricity fails to reach the end consumer, thus failing in its purpose. Even till date, India plays host to the world’s biggest brownout, which leads hundreds of millions of people living without power due to a grid failure. Reason for these issues can be traced to weak energy transmission facilities. Lack of capable electricity transmission has created gaps between energy generation and sending them to the farthest corners of the nation. India’s power requirement has grown consistently from 10 Lakh MW in FY 13-14 to 12 Lakh MW in FY 17-18. And although, the energy deficit has reduced considerably (-4.2% in FY 13-14 to -0.7% in FY 17-18), due to solar growth, lack of focus on grid management has become the weakest link in pursuit to provide power to all. Besides lack of grid connection availability in the nation, DISCOMs currently suffer from losses due to lack of an upgraded infrastructure. Even developers and investors are showing hesitation in shouldering solar projects due to feeble transmission system, which can result in loss of electricity distribution.

Surveys show that improving grid management, energy storage, and demand response can enable 25% or higher penetration of solar panels. So, it is fair to state that Government of India must focus on improving and establishing functional grid infrastructure along with ramping up solar capacity.

RPO Target Increased, But Needs Enforcement

Besides transmission woes, solar energy in India is also facing challenges in meeting renewable purchase obligation (RPO) targets. According to Government of India’s mandate, states in India have to procure a portion of their energy from renewable resources. However, it is important to note that nearly, 16 Indian states are behind in reaching set RPO targets (less than 60% of their targets). Although, states like- Rajasthan, Gujarat are doing well in solar installation, and have huge potential in leading Indian solar revolution, still they are failing in respect of meeting RPO targets. This is not a sudden development; sates in India have been failing to reach the targets for quite a while now (5 years in a row). State regulatory commissions allowing DISCOMs to carry the unfulfilled RPO burden to the next year and lack of enforcement have added to this issue.

India’s recent revision of RPO targets and creation of a new monitoring cell, which will actively focus upon state’s monthly RPO compliance, is indeed a move in the right direction towards supporting solar energy in India. However, more effort is needed to improve financial health of DISCOMs, which is one of the other reasons behind state’s failure in reaching RPO targets. And though, Ujwal DISCOM Assurance Yojana (UDAY) programme is working towards unburdening DISCOMs, so they can purchase green energy, the changes are still minimal.

Development trajectory and policy environment indicate a bright future for solar panel installation in India. However, it is extremely important for India to push solar energy into the grid in order to raise solar acceptability and adoption rate. Therefore, besides increasing solar panel installation rate, the country needs to improve upon its electricity transmission and meeting RPO targets at any cost.