Investment in Solar Sector

Most solar power projects come in the country with private sector investment. All the nationalized banks and NBFCs, including IREDA, provide funding to solar power projects. The major policy initiatives taken by the Government to mobilize long term financing for renewable energy projects, inter alia, include financing of renewable energy projects through National Clean Energy Fund (NCEF) as per its norms, increasing the authorized capital of Indian Renewable Energy Development Agency and extending new lines of credit to enable it to enhance its concessional loan to RE projects, mobilizing project based concessional loans through multi-lateral and bi-lateral agencies i.e. World Bank, Asian Development Bank, KfW-Germany; inclusion of Renewable Energy Projects in Priority Sector Lending of Banks; and approval for issuance of tax free infrastructure bonds for funding renewable energy projects. Government is promoting development of solar energy in the country by providing various fiscal and promotional incentives such as capital subsidy, accelerated depreciation, waiver of Inter State Transmission System (ISTS) charges and losses, Viability.

INSTALLED CAPACITY TRENDS

The share of Wind Power has remained constant, as it has a market of 30% in 20211 of the total installed capacity of Hydro (excluding pumped storage), Wind and Solar, now also in 2020 the percentage having 31%, but the share of Hydro and Wind has changed a lot. In 2021, Solar Power installed capacity constitute 32% among the total installed capacity of Hydro, Wind, and Solar Power, on the other hand, the share of Hydro Power (excluding pumped storage) were in the decreasing Trends. In 20211, the share was 69%, while in the years 2019 and 2020, the share was just 30% and 37%. The Ministry of Power is also putting RPO compliance for Hydro Power to give a boost to the segment.