Solar Power Bank May Derail India's Clean Energy
Transition 

Impacts of the Bank



The Bank on solar power installations and manufacturing units in various states
will disrupt India's clean energy transition goals. The country has an
ambitious target of achieving 500 GW of non-fossil fuel generation capacity by
2030, of which 280 GW is expected to come from solar power alone. However, the Bank
jeopardizes this target as it creates uncertainty around solar power projects.
Developers may shy away from commencing new projects due to unclear policies.
Existing projects under development may also face delays or cancellations.
The Bank will also negatively impact solar module manufacturing in India. The
government had launched production-linked incentive schemes to boost domestic
manufacturing. Several companies had set up or were in the process of setting
up manufacturing units. However, with no clarity on solar power procurement
policies, manufacturers may reconsider their expansion plans. This will stunt
the growth of India's fledgling solar manufacturing industry, prolonging
dependence on imports from China and other countries.



Impact on Jobs and Investments



The solar power sector has emerged as one of the largest job creators in
India's renewable energy industry. It was estimated to indirectly employ over
50,000 people across manufacturing, installation, operation & maintenance
activities by 2022. However, the Bank threatens these job opportunities as it
brings new project development to a halt. Several states that had announced
large solar tender plans may cancel ongoing bids or put future auctions on
hold. This will diminish prospects for new employment.
Similarly, investments in the  Solar
Power Bank sector will take a hit due to the Bank. As per estimates,
about INR 5-6 lakh crore worth of investment was lined up in solar projects
under development and tendering across India. Now, the foreign and domestic
capital flowing into the sector is at risk of stall or flight to other
high-growth markets without regulatory uncertainty. This will be a blow to
India's renewable energy goals.

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