Thursday, March 20, 2014: India has reportedly cut the annual budget of the Ministry of New and Renewable Energy (MNRE) by nearly Rs 11 billion, marking a risk that will impede the expanding rooftop solar projects. The budget cut will impact the solar industry by huge margins, as many firms have already started to interpret the results.
MNRE is granted a total budget of Rs 4.41 billion, that is, $72 million for the 2014-2015 financial year, starting this April. The budget is a massive cut down from Rs 15 billion for the current fiscal year.
According to a About Bnef report, New Delhi-based solar consultant Bridge to India Energy said, “This is likely to have a negative impact on the rooftop solar market in India,” to the company’s clients via e-mail. It said that states like Kerala, Andhra Pradesh, Tamil Nadu and Uttarakhand may stall their rooftop incentives. These state governments depend on the ministry to fund parts of the state solar programmes.
Bridge to India said, “The renewable ministry disbursed less than 30 per cent of last year’s Rs 15 billion as India’s current-account rose to a record,” which led to a “grinding halt” in the rooftop solar market, as many companies were not able to collect the viable subsidies from the government of India.
India has so far built more than 2000 MW of solar capacity in the last two years, alone. Most of the solar power units are centred in large desert farms, which provide good amounts of sunlight. The electricity generated from these units are fed to the power grids.
