2019 Can Be Fruitful For Solar, Only Through Policy Alignment

The year 2019 is expected to improve Indian solar scenario, which witnessed a slowdown in second half of 2018. Research data indicates that more than 35 GW of solar projects were tendered in the country between Jan-September 2018. Surprisingly, near about 13 GW of projects were auctioned at the end of the year. This stands as 65% decline in tender activity in Q3 2018, in comparison with Q2 2018.

However, in 2019 developments like, introduction of battery storage policy will have positive effects on renewable energy capacity addition. According to Bridge to India 15 GW renewable energy capacity will be added in 2019 (out of which most will come from solar), which is twice the capacity compared to 2018. However, recent policies have made a dent in the Indian solar growth and stand as challenge in way of solar growth. Let us split the expectations and effect of policy to identify the current scenario.

Continue reading

How to Preserve Investor Interest?

Indian solar sector showed incredible progress in recent years by becoming a 30,000 crore industry. But, in Q1 ​​2018 corporate funding within the solar industry fell by 65%. Fortunately, the numbers have significantly increased by 15% as 2018 comes to a close. Nearly $5.3 billion was raised by the first half of 2018 in comparison to 2017. As a nascent industry, the Indian solar sector needs support and funding to grow. And, factoring in the growth of funding scene, this can be construed as a positive development for solar in India. However, to predict the outcome, we need to inspect the present scenario in depth.

Continue reading

How Indian Solar Sector is doing under GST Regime

GST is undoubtedly one of the bold reformations that promised to change Indian economic landscape for good. It has led to standardization of indirect tax laws, thus making them business friendly and intelligible for investors. Cascading of taxation was also removed by GST, which was the biggest problem with previous tax regime. All this significantly leads to ease of doing business in India.

However, aside from offering benefits, has also presented some challenges for nascent solar industry of India. Indian solar industry made incredible strides in recent years reaching 21 GW installed solar capacity in 2018 Q1 from a meagre 10 MW in 2010. New projects are being introduced, and investor interest in Indian solar sector is growing. In this scenario, policy reformations could have opened up even bigger opportunities for growing solar industry, leading India out of energy scarcity.

Continue reading

Pricing Pollution: an Approach to Support Green Energy Growth

Curbing pollution and limiting global temperature rise is a necessity now. The Paris Agreement presented a platform from where initiatives for climate protection can be mutually taken by countries of the world.

However, consider these facts –

  • Global energy supply through fossil fuels have reached from 6,100 million tonnes of oil equivalent (Mtoe) in 1977 to 13,700 Mtoe by 2014.
  • Global energy related CO2 emissions are estimated to increase at an average of 1.0% from 2012 to 2040.
  • From coal combustion alone, Asia’s CO2 emission is estimated to rise more than 2.2 billion metric tons in the future.
  • Renewable energy (mainly solar) has reduced fossil fuel share by 22 per cent.
  • 1 KW of green energy can reduce more than 3,000 pounds of CO2 annually.

We can come to a conclusion that green energy revolution is a necessity to stop climate degradation. And although it offers a reprieve from climate issues, countries working towards green energy transition is not enough to stop the spread of pollution from distorting the future of the world (dust and particulate matter (PM) may be reducing energy yield by 17-25 per cent annually in Northern parts of India and solar panels in Baghdad were seen to be producing less and less energy due to dust particles blocking the sunrays). We must take positive action towards reducing the pollution as well.

Carbon pricing or Pollution pricing can act as an efficient tool to reduce pollution, aiding green energy transition and climate restoration.

Carbon Pricing Or Pollution Pricing

Pricing pollution is quickly becoming one of the most important and promising methods of curbing pollution from the world. Business groups, investors- like The World Bank have made strides to encourage Governments and corporations to put a price on carbon to drive down emission, while speeding up green energy transition.

Why Supporting Pollution Pricing Is Necessary?

Price on carbon can shift the burden of the damage to environment and life through occurrences such as- health care costs from heat waves, damage to crops, damage to property and life due to droughts of flooding and sea level rise. By imposing tax on pollution production, these environmental issues can be reduced. The revenue generated from the taxation can be used to boost green energy transition, thus phasing out fossil fuels, which are the major contributors to pollution. This can serve as the most cost effective way of promoting climate protection and green energy generation. The carbon pricing can also support green energy market innovation through low-carbon drivers of economic growth.

Types Of Carbon Pricing

There are primarily two types of carbon pricing methods. Emissions trading systems (ETS) and Carbon Taxes.

Emissions trading systems (ETS)– are sometimes referred as cap-and-trade system, it imposes caps on the total amount of green house gas emissions and lowers the cap over time. Through this system, companies are extended emission permits. The purpose of ETS is to establish a market price for green house emission; and caps ensure that emitters keep to their emission levels, considering their pre-allocated carbon budget.

Carbon Tax– This system sets a price for carbon directly by establishing a tax rate on carbon content of fossil fuels or greenhouse gas emissions.

Depending on the economic and environmental standings, a country can select one of these components to restrict its carbon emissions. As it will promote green energy adoption, and climate betterment, carbon pricing will need additional policies for support.

  • Some of examples of complementary policies include- setting fuel/energy efficiency standards for vehicles, buildings, heating and cooling systems.
  • Offering tax breaks for energy efficiency improvements, auto feebates.
  • Setting renewable portfolio standards and mandates for having a share of renewable energy within energy mix.
  • Enforcing laws to stop de-forestation.

More than 40 countries like- The US, Germany, Chile, Brazil, and some of the EU countries have already implemented or in process of implementing these policies to support Carbon pricing.

Exceptional Examples

Estimating that carbon pricing could reduce pollution by 80 to 90 million tonnes by 2022, US states like California have introduced state-wide policies in support of carbon pricing.

Climate awareness in Canada has seen nearly 97% of its residents to commit towards pricing carbon pollution. Provinces like Quebec and Ontario in Canada have implemented cap-and-trade systems- enforcing to get permits for carbon pollution, curbing the pollution rate.

India Walking Towards Success

To support solar energy growth in India, the country is also implementing supporting policies like carbon pricing. And as a result In 2017, 40 Indian companies out of 139 companies in Asia have put price on carbon.

Government of India’s initiative towards Perform-Achieve-Trade (PAT) policy for energy efficiency, and renewable energy certificate scheme have also supported carbon pricing. World Bank and the Government of India are working together to explore a domestic carbon market in micro, small, and medium enterprises.

 

Carbon pricing provides emitters financial incentive for choosing green energy solution as it will generate energy without levying taxes. And with the world, India is working towards restoring the climate by selecting green energy and initiatives that speed up transition from fossil fuel. However, considering the rapid growth of population and pollution, world wide efforts need to be increased to see expected results.

 

https://www.canada.ca/en/environment-climate

change/news/2017/05/pricing_carbon_pollutionincanadahowitwillwork.htmlhttp://www.worldbank.org/en/programs/pricing

carbonhttps://www.carbonpricingleadership.org/what/

 

Share your thoughts with me on this at @gyaneshc.

 

 

 

 

 

 

 

Blanket Safeguard Duty: If Implemented It Can Have Disastrous Effects on Indian Solar Industry

Director General of Trade Remedies (DGTR) initiated Safeguard Duty investigation on import of  Solar Cells, whether or not assembled in panels or modules in December 2017. The Director General of Trade Remedies in its preliminary findings recommended to impose 70% safeguard duty on imported solar cell and modules imported in India. Recently Committee of Secretaries decided to not impose Safeguard Duty based on preliminary findings and it decided to take call on duty once DGTR releases it’s final findings.  However, we should evaluate the scenario that will unfold if the duty is imposed.

 

Safeguard Duty: A Boon or Roadblock?

Indian solar industry is growing and the consistent progress portrays the Government initiatives in a bright light. However, the industry is still at a nascent age and requires constant support in development of a favourable environment for growth. And although, protecting domestic manufacturing industry seems to be the right move (Domestic players had a market share of 13 per cent in FY15, which is estimated to decline to 7 per cent in FY18), we have to understand that blanket Safeguard duty could lead to counterproductive results.

Continue reading