By Bharat Sharma and Rashi Singh
Uttar Pradesh’s climate goals are bound to have implications on India’s national targets – the state is home to a sixth of the country’s population and is the fourth largest in size. So, UP’s new solar policy, cleared by the state cabinet in November 2022, is a welcome move since it endeavours to align its renewable energy targets to the changing realities of the present. What would it take to realise this policy vision and accelerate the uptake of solar energy in the state, which is currently at 4 per cent?
UP’s Solar Energy Policy 2022 is a timely upgrade over the previous one introduced in 2017. The amended policy sets an ambitious target of achieving 22,000 MW solar power capacity by March 2027, with a third coming from distributed generation. The policy also proposes an attractive capital subsidy of Rs 2.5 crore per MW (roughly 20-25 per cent of the total project costs) for large-scale solar parks with storage facilities to attract investments into round-the-clock power. The state also plans to develop Ayodhya as a model solar city along with 16 other municipal corporations. To ensure that the benefits of clean energy reach everyone stand-alone solar power packs will be promoted among households in unelectrified villages and hamlets identified by district-level committees. This massive project will generate jobs too – 30,000 youth will be trained as Surya Mitras to work in solar power plants.
The new policy enlists measures to address some key bottlenecks hindering the sector’s growth. It proposes to address the land acquisition issue by creating land banks and offering land to the government and private sector on 30-year leases at a fixed rate. The nodal agency for the policy, Uttar Pradesh New & Renewable Energy Development Agency (UPNEDA), would receive a dedicated corpus fund and have the power to levy consultancy fees for supporting institutions in implementing solar projects.
As the Uttar Pradesh government implements this policy, it would be useful to incorporate key learnings from the 2017 policy experience and investigate good practices followed by other states. We propose a few suggestions in this direction.
Implementing UP’s new solar policy
First, a comprehensive roadmap to better achieve policy targets is required. Such a roadmap should be periodically revised based on progress review and the status of deployment of solar energy technology, as is done by Gujarat Energy Development Agency (GEDA). Additionally, well-defined performance metrics with publicly accessible data will ensure the assessment of progress vis-a-vis the action plan. A public grievance-cum-consumer support system under the nodal agency, like that of the Jharkhand Renewable Energy Development Agency (JREDA), can also serve as a public feedback mechanism for timely course correction.
Second, the challenges in coordination among various stakeholders need to be addressed for smoother processes. Multiple institutions such as discoms, agriculture and revenue departments have a role in effectively implementing this solar policy. Having state-level representatives from all the concerned departments and stakeholders in the existing committees can address coordination-related challenges. Public hearings, as in the case of electricity regulatory commissions, can ensure periodic stocktaking of roadblocks and the participation of citizens. There is also a mismatch between the policy and the state electricity regulations, with the policy suggesting net metering for government institutions and state regulations allowing net metering only for domestic and agricultural consumers. Public hearings may address such misalignments.
Third, consumers need to be aware of the benefits of Distributed Renewable Energy (DRE) – here, solar power. Local-level campaigns with curated messaging on individual and community benefits of solar energy, installation process, and available government assistance, including subsidy, will boost the state’s uptake of rooftop panels and solar pumps.
Fourth, innovative financing models can address the challenge of up-front installation payment required from individual consumers. Adequate financing options will also incentivise the migration of consumers benefiting from free or highly subsidised power. Models such as interest-free credit via public financial institutions or Karnataka’s farmer-developer special purpose vehicle (SPV) model can help unburden the public exchequer in the long run.
Besides the subsidised consumer segment, Commercial and Industrial (C&I) consumers have considerable potential in the solar energy segment. However, its uptake among them would require rationalisation of Feed-in-Tariff (FiT) that is attractive enough for C&I consumers and viable for discoms purchasing power from them towards Renewable Purchase Obligation (RPO) fulfilment.
Renewables in Mission Mode
Most states have recently revised their solar/renewable energy policies to redefine their goals post-2022 – the deadline set by the Union government to achieve 175 GW of renewable energy. It is essential that states share their best practices and learnings to work towards the new climate-action goals collectively. Civil society actors such as academics, researchers, activists, and private institutions should also join hands to support government efforts towards India’s Net-Zero goal through knowledge exchange and amplifying on-ground feedback. The key to achieving our ambitious climate targets is collective action in mission mode.
(Bharat Sharma and Rashi Singh are Programme Associates at the Council on Energy, Environment and Water – CEEW – an independent, non-for-profit research organisation. Views expressed are personal.)