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.

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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.

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Solar Skill Development in India: A Necessity to Sustain Progressive Growth

Global solar industry has grown immensely within last couple of years. In 2017, China added 52 GW of new solar installations, while US installed 12.5 GW, India ~6 GW, Japan 5.8 GW, Germany 2.2 GW, taking respective positions as World’s leading solar countries.

Government of India has made huge strides to solarize the country. However, efforts are sure to come up short if one of the most important component of growth ‘manpower’ is not enhanced to shoulder the new responsibilities.

Current Scenario

It is important to note, that more than 200 million people in India still live without electricity, and since India’s solar mission is directed towards providing power for all, while benefiting from green energy transition, solar skill development efforts have to match or even surpass the solarisation goals.

Unemployment is a growing issue that is threatening to undone world’s efforts at transforming the socio-economic structure, in hopes of a better and sustainable future. And since India has 600 million people (more than half of its population) under 25 years, the country needs to make better and faster efforts at creating jobs. Fortunately solar has presented the solution with ease.

Solar industry has created 103,000 jobs in India till December 2017 and 1,017,800 jobs are expected be created within 2022. And not just in India-

  • In US, solar energy is creating 13.7 jobs per million dollars spent, surpassing fossil fuels (coal, oil, natural gas) as it creates 12.1 jobs per million spent.
  • Brazil has hopes of creating 60,000 to 90,000 new jobs by the year 2018.
  • European Union is expected to create +1.25 million economy-wide renewable energy jobs by 2030, reducing 40% greenhouse gas emissions.
  • Mexico is expected to create +134,000 jobs in renewable energy sector by 2030.
  • United Kingdom can create +70,000 net employment in renewable energy by 2030.
  • Renewable energy is expected to create 24 million jobs by 2030 globally.

Therefore, it is apparent that investing in solar skill development will solve the unemployment problem, while aligning India’s solar mission with a talented resource pool to complete it.

solar skill

Government Initiatives are here but So are Challenges

Government of India properly understands the requirements at hand, and they have taken initiatives to build a capable work force. The Ministry of Skill Development and Entrepreneurship (MSDE) has worked towards to create qualification standards to create more green energy work force.

The Ministry of New and Renewable Energy (MNRE) has also made efforts to incorporate green energy education in various formal and in-formal training outfits. MNRE has also partnered with the United States to develop Solar Energy Training Network (SETNET), to make solar training programs in India more robust.

However, there are bureaucratic hurdles that limit the interaction between training institutes and industry. This is creating a huge gap between the demand and the available skilled resources. Besides the training systems currently are more focused towards theoretical understanding of different stages of solar development and lack of practical know how.

Additionally, high training cost also stands as a road block to quicker solar skill development.

Remedy to the Problems

  • Education Should Be Comprehensive: while establishing new training programs and policies, Government of India should also focus on the coursework and make sure that it is industry focused and has substantial practical training processes. Government should arrange access to domestic solar manufacturers and EPC solution providers to the students, to allow them hands on practical knowledge on various solar development processes.
  • Establishing Training Institutions: Policy makers need to mandate at least one solar training institute in every state to support state wise solar growth. And locations of these institutes should be identified through advertisement to raise awareness.
  • Training Standardization and Certification: Training curricula should be standardized and certified to produce skilled resources, who can be easily hired across state lines.
  • Reduction of Training Cost: Due to the solar boom and world wide acceptance of solar, demand for skilled solar employees is incredibly high in India. And so is the training cost. Government needs to reduce this cost or offer flexible education loans to encourage students into selecting Solar as a career.
  • Utilizing International Platforms: India’s National Institute of Solar Energy (NISE), should utilize international platforms like ISA, to get acquainted with international best practices to develop skills.

Way Forward

picc

India needs 1,116,400 skilled professionals in solar manufacturing, design, construction, maintenance, business development, and commissioning to reach its 100 GW by 2022 target. And although, India has shown incredible growth in solarisation, more focus is needed to boost solar skill development to reach the targets in sight. Otherwise the country may come up short in realizing its goals, which are suspected to transform the country.

https://www.theguardian.com/commentisfree/2018/jan/13/india-600-million-young-people-world-cities-internet

https://timesofindia.indiatimes.com/city/madurai/By-2020-India-will-have-the-largest-young-workforce/articleshow/51368384.cms

https://www.firstpost.com/india/india-worlds-largest-youth-population-well-ahead-china-un-report-1808537.html

https://www.thenational.ae/business/economy/industry-relevant-skill-training-on-the-rise-in-india-1.678584

http://ceew.in/pdf/CEEW-NRDC-Filling-the-Solar-Skill-Gap-Report%2012Feb16.pdf

https://www.nrdc.org/experts/anjali-jaiswal/what-skills-are-demand-grow-indias-solar-energy-market

http://www.thehindu.com/news/cities/Delhi/programme-to-train-future-solar-energy-technicians/article8236124.ece

http://vikaspedia.in/energy/policy-support/renewable-energy-1/suryamitra-skill-development-programme

http://www.skillreporter.com/2017/12/news/other-minstries/national-institute-solar-energy-nise-organize-skill-development-program-solar-pv-system-design-using-pvsyst-pvsol-software/

 

Share your thoughts with me on this at @gyaneshc.

Resource Efficiency Policies and Initiatives Can Ensure Sustainability for India

Continuously depleting natural resources pose a great threat to the world as its population continues to rise. Starvation, lack of energy, and important requirements to sustain life throughout the world has made it obvious that current consumption and production patterns are unsustainable. Focus on manufacturing and management of resources is extremely important to maintain life on Earth; otherwise the threat surrounding us would lead to further inequities. Management of lifecycle of resources, from their extraction to consumption and eventually disposal of waste has to be efficient to create and maintain sustainability of life as we know it.

Although, worldwide changes are being seen that surface necessities and align with the requirements of sustainability, not always they lead to expected results. And since managing resources is a global commitment- countries failing to create, establish and follow the process result in limiting global environment improvement. The only way to remedy the situation is cross country collaboration and development of understanding between policy and businesses within a country.

How Can Resource Efficiency Help?

Developing policies and business practices to have minimal impact on environment can also lead to adoption of resource efficient practices that can help in integrating circular economy methods. Reuse of waste would gain efficiency and responsible management system would allow countries to save millions and billions by reducing expenses and import requirement.

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Government of India’s step towards solarizing the country is indeed an inspiring and decisive step to revolutionize energy generation and usage. The country has also announced plans of embedding resource efficiency and circular economy in initiatives and polices such as- Smart Cities, Swach Bharat, Zero Effect-Zero Defect Scheme, Ganga Rejuvenation Mission, Make in India etc, which will save resources and expenses.

How Is India Working Towards Resource Management?

NITI Aayog has joined hands with European Union delegation and released strategy on resource efficiency, which is supposed to help develop circular economy that will translate into sustainable development of the country. The strategy showcases action plans involving-

  • Manufacturing capacity development
  • Institutional development
  • Sharing of best practices
  • Development of an indicator monitoring framework
  • R&D and Technology Development
  • Waste-exchange platform

These processes will support sustainable public procurement, development of industrial clusters, and information sharing & awareness generation, saving money and leading to a better developed country.

However, to operationalize strategies for resource efficiency, India needs to create and follow sectoral policies in investment, education, innovation, trade, and skills development that can support resource efficiency development.

Why Policies Are Needed?

Policies are needed to facilitate the resource efficiency processes within the management supply chain of businesses. Strategies cannot deliver result unless businesses develop resource management processes within their existing framework. In order to do that, businesses often need financial support to accept and adopt large scale efforts towards waste management and efficient resource handling. Lack of technological infrastructure also hinders businesses in following the strategies prescribed the Government. In such cases, policies facilitating support can help. It is also important to improve the economic analysis of efficient resource management.

The Way Forward

Evolving consumerism has urged rapid changes in product and service generation. India has done a marvellous job in energy generation and management by selecting solar. However, rethinking the resource management processes and effectively incorporating processes that will focus on resource usage, increasing exports, and reducing forex outflow is needed.

 

http://wsds.teriin.org/imperatives-operationalizing-resource-efficiency.php

 

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Indian Energy Storage Market: An Opportunity to Support Rapid Solarisation

Driven by deteriorating climate conditions, failure to provide electricity to all (~1 bn people globally), and depleting conventional energy reserves, the world is now rapidly shifting towards green energy- mainly solar and wind. However, since energy generation through solar and wind are intermittent, there is a merit in thinking and taking active steps towards energy storage.

The way developing countries are aggressively investing in renewable energy, it is fair to state that energy storage industry will flourish within developing countries in near future. It is estimated that by 2035, developing nations will account for more than 80% of global growth in energy production and consumption. And energy storage will definitely play a major role in that scenario.

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