The renewable energy industry has praised the government for propelling growth but it has said that inconsistent policy was a hurdle for the sector. In a survey by Bridge to India with CEOs of 41 Indian and international companies, 73 per cent are optimistic about the sector's growth.
The CEOs have said that akey positive of the Narendra Modi government was promoting renewables while the failure was policy instability. Bridge to India is a leading consulting and knowledge services provider in the Indian clean energy market.
“Modi government has failed in maintaining a consistent policy and business environment. Imposition of trade barriers and GST has added uncertainty and confusion,” said the report based on the survey. It further said the industry expects the new government to improve business execution and provide policy stability.
India is expected to add 80 GW of renewable capacity in the next 5 years. The bulk capacity addition (47 GW) is expected in grid-connected solar. Floating and grid scale storage are also expected to pick pace, said the report.
“The most pressing issue for the industry is offtake risk, followed by challenges in land acquisition and uncertainty in overall policy environment. Around 49 per cent of those surveyed felt that bidding in the sector is irrationally aggressive. The industry remains unenthusiastic about prospects of domestic manufacturing. However, in comparison to last year, the outlook has considerable improved,” said the survey report.
Of the surveyed CEOs, 39 per cent were optimistic about the growth of the sector. The surevy noted the optimism is more than last year despite imposition of safeguard duty, GST and BIS implementation niggles, project delays, tender cancellations, falling Rupee and policy reversals.
Vinay Rustagi, Managing Director, Bridge to India said, “Overall, the survey paints an optimistic picture for renewable energy sector growth. If effective measures for DISCOM reform and network connectivity are put in place, we can expect much higher capacity additions in coming years. We also believe that the sector enjoys broad cross political support and there is unlikely to be retreat irrespective of who forms the government.”
The industry rated offtake risk and uncertain policy environment as the biggest concerns in the sector. The industry remains pessimistic about solar panle manufacturing prospects in India.
“This is understandable as all the government initiatives to promote domestic manufacturing – manufacturing linked tenders, CPSU scheme, KUSUM and safeguard duty – have failed to produce any positive results,” said the survey report.