The summary of the just concluded RENERGY 2014, Chennai – organized by TEDA is quite revealing. Project developers relying on MNRE’s 30% subsidy seem to be fed with the non-payments. The subsidy applies to rooftop PV system below 100 kW, but the MNRE has not taken applications for the subsidy since February 2013. It was recently in the news that MNRE has a subsidy disbursement backlog to the tune of a massive 3200 crores!
Potential customers who have viable rooftop projects without subsidies still want to try their luck with a subsidy application and are willing wait a few months or even a year. Even when PV installation companies tell them the subsidy won’t come, they prefer to hold out for the potential 30% cost reduction. After the end of that waiting period, the customer’s interest in solar PV has waned.
There is another interesting spin to the story. It is common knowledge that the commercial and industrial sectors make for an attractive solar proposition as they are paying high electricity rates. However the other side to the story is that payments from this sector is used by states to cross subsidize the agriculture sector! So if they don’t pay, the financial books of the already indebted (being polite) state utilities will go further south. No wonder why state governments are uninterested in letting commercial and industrial customers use solar PV. A point in case, Tamil Nadu approved a net metering policy in November, but the policy excludes commercial and industrial customers.
Now only if Mr. Modi can waive that magical wand he has.