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Review of subsidy plan for off-grid solar applications

According to reports, the government is reviewing the subsidy scheme under its flagship programme aimed at promoting off-grid solar applications such as irrigation pumps, home lights and solar lanterns after its dues to solar equipment makers swelled to 1,000 crore because of unanticipated rise in demand.

The vendors, which charged consumers only 70% of the product price in the hope that the government would contribute the balance, are now waiting for the ministry of new and renewable energy to settle their long-pending claims.

“The ministry has requested the government to release money from the National Clean Energy Fund while the ministry is also contributing its share. The ministry is allocating subsidies as the project proposals come,” said Tarun Kapoor, secretary in the ministry of new and renewable energy.

Under the Jawaharlal Nehru National Solar Mission (JNNSM), the government has set an ambitious target of commissioning 20,000 mw of grid connected solar power projects and 2,000 mw of off-grid capacity by 2022.

The total installation of solar off-grid applications across the country increased to 35.09 mwp (megawatt equivalent power) in 2013-14 from 17.59 mwp a year ago. The total number of installations rose to 20 lakh by the end of 2013.

The ministry is redesigning the format of subsidy disbursement in the wake of growing demand and delays. It is also benchmarking the performance of off grid-products and introducing efficient monitoring system to make the programme more effective. “The impact of subsidy to incentivise off-grid has shown its results. It has drawn in many players, most of them working at the grassroots. The government needs to link benefits to the performance of the companies now,” said Shyam Patra, founder and chief executive of Naturetech Infra, an Uttar Pradesh-based company engaged in installing micro grids in rural areas.

The ministry has allocated 350 crore for off-grid solar projects out of the total budget outlay of 1,500 crore per financial year, which is proving insufficient in view of the success of the programme, an official said.

An executive with a Delhi-based equipment maker said his company had received just half of the subsidy it claimed, that too after a year-long wait.

The ministry official, who is a part of the drafting process for the revised subsidy scheme, said, “The government wishes to move away from pure implementation-based model to more ‘result-linked benefit’ model. As the outreach of off-grid is increasing and multilateral financing is being pumped in renewable energy, subsidy disbursement needs to be closely monitored.”

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