Policy certainty will increase domestic and international investing into India, a new report out on Thursday by the Institute for Energy Economics and Financial Analysis (IEEFA) said.
The report, India’s Renewable Energy Policy Headwinds – Recommendations for Urgently Accelerating Activity in the Renewable Energy Sector, finds a number of recent policy positions that have undermined growth in this sector.
“India is one of the world’s largest and fastest growing markets for renewable energy and power transmission,” report author and IEEFA’s Director of Energy Finance Studies Tim Buckley told IANS in a statement.
“Domestic renewable energy tariffs are now two thirds the cost of domestic coal-sourced power tariffs and half that of new imported thermal power costs. “India must be very proud of this result, and they must leverage this opportunity to enhance energy security whilst securing deflationary domestic energy investments.
“The opportunity cost of delaying India’s electricity sector transition is too high. “With a few policy tweaks, India could be back on track to meet its ambitious target of 450 gigawatts of renewables by 2030,” said the report.
The IEEFA report identifies a number of policies currently stifling growth in renewable energy sector in India. They include the imposition of the solar cell and module trade duty in 2017, which the government is now looking to extend beyond 2020.
The duty has neither reduced imports nor significantly improved the competitiveness of Indian manufactured solar cells. Instead, it has severely slowed down solar installs in India, both because of the extra cost imposed but equally due to the confusion on delayed implementation.
“The uncertainty of this trade duty has been one of the most serious impediments to India’s renewable energy momentum,” said co-author Kashish Shah, IEEFA’s energy finance analyst.