The Govt. is considering extension of incentives for the wind energy sector in the coming budget. Generation - Based Incentive (GBI) and Accelerated Depreciation (AD) are the two incentives which has propelled the wind power capacity so far. GBI may be continued as it is paid only on power generation. However, now options like RECs (Renewable Energy Certificates) are also available, which can take place of GBI. RECs would require lesser involvement of the Govt. and increase efficiency of the developer. AD, which is being provided to captive users, should be done away with on an immediate basis as it is used as an income-tax saving tool rather than for installation of wind energy capacity. In one of the wind energy projects its was observed that turbines have been set-up, however, no generator had been installed, which is a clear case of mis-use of AD incentive. Govt. should take back a step and let developers build capacities only if it is viable business.
On the solar power front, Govt. has announced that the phase - II of JNNSM would be Indianized, by which imported solar panels/cells would not be allowed for setting up projects. Indian solar equipment industry is a fledgling industry right now with a very few number of players. The solar energy generation from Indian as well as foreign equipment over long periods of time is yet to be tested in the Indian environment. The National Solar Mission was launched in 2009 and the Govt. should wait for at least 10-15 years for the sector to develop before taking calls on nationality of equipment manufacturer. If foreign players can quote abnormally low prices like Rs. 7.18/kWh, it is the time to wait and watch how things work out, rather than lashing out on foreign equipment.
Renewable energy has been mainly sustaining on government subsidies and policies. Although during the initial periods Govt. has to provide subsidies, there should be timeframe in which these should be phased out so that market forces determine which source of energy is to be used.
On the solar power front, Govt. has announced that the phase - II of JNNSM would be Indianized, by which imported solar panels/cells would not be allowed for setting up projects. Indian solar equipment industry is a fledgling industry right now with a very few number of players. The solar energy generation from Indian as well as foreign equipment over long periods of time is yet to be tested in the Indian environment. The National Solar Mission was launched in 2009 and the Govt. should wait for at least 10-15 years for the sector to develop before taking calls on nationality of equipment manufacturer. If foreign players can quote abnormally low prices like Rs. 7.18/kWh, it is the time to wait and watch how things work out, rather than lashing out on foreign equipment.
Renewable energy has been mainly sustaining on government subsidies and policies. Although during the initial periods Govt. has to provide subsidies, there should be timeframe in which these should be phased out so that market forces determine which source of energy is to be used.
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