Modi's rooftop Solar push is slowed down by unwilling lenders, states
Vendors and analysts claim that despite the heavy subsidies, I ndian Prime Minister Narendra Modi is not able to achieve his targets due to loan delays and limited state support.
These shortfalls are the latest "challenge" to India's efforts at nearly doubling clean energy capacity by 2030 to 500 gigawatts. The government is planning to suspend the clean energy tendering target amid an increasing backlog of projects that have been awarded but not yet built.
India may continue to rely on coal because of challenges to its plans to increase the use of solar power.
In February 2024, the Ministry of New and Renewable Energy in India will launch its subsidy program for solar panels for homes. The programme covers up to 40%.
According to the website of the program, the number of residential installations is 2.36 million. This is well below the Ministry's target?of 4 million by the end March.
Shreya JAI, lead energy analyst for Climate Trends New Delhi, said that the reluctance of banks to lend money and the reluctance of states to promote these schemes could derail India’s efforts to move away from coal.
According to data from the government, about three out of five applications for rooftop solar panels submitted on the website of the scheme, also known as PM Surya Ghar, are still awaiting approval. About 7% were rejected.
The renewable energy ministry issued a press release about the pending requests. It cited?accelerating installation which has benefited more than 3 million households.
The statement said that "the loan rejection rate varies by state."
In the PM Surya Ghar scheme, consumers select a vendor to handle all paperwork and arrange bank financing of solar panels. The vendor must submit proof after the loan has been approved and the installation is complete. After that, the subsidy will be credited to your bank account.
Bank Delays
Banks have rejected or delayed loans due to a variety of reasons, including a lack of documentation. They claim that this is needed to protect public money.
"We're working with the government on standardizing documentation to prevent bad loans. If loans fail, the banks can remove these panels. But what will we do with them? A senior official from a large government-owned banking institution said this.
Chamrulal Mishra is a solar vendor from the Indian state of Odisha in eastern India. He said that applications are rejected often because customers have missed payments on electricity or land records still show deceased relatives' names.
Residents dispute claims of missed payments. They attribute administrative errors to a change in ownership decades earlier.
The Department of Financial Services in India, which is responsible for regulating the banks of the country, has responded to the consumer's feedback by allowing co-applicants to be allowed to make loans and to resolve title claims. They have also simplified the documentation requirements.
The Renewable Energy Association of Rajasthan (REAR) said that some banks were requiring collateral for loans below 200,000 Indian Rupees ($2,208.87), even though scheme guidelines did not require it. This is preventing solar power expansion.
State Bank of India, Punjab National Bank and other large lenders in the country did not respond to requests for comments on this issue.
State-owned utilities also do not promote rooftop solar systems as much because they are concerned about losing revenue as more sales are moved off the electric grid.
Wealthier households tend to have higher electricity usage, more expensive tariffs, and a reliable roof access. "When they switch from the grid, this leaves them with a greater financial burden," said Niteesh Shanbog. An analyst at Rystad.
(source: Reuters)
