Assam’s solar push for India’s Forex resilience

As India tightens its belt to save foreign exchange by cutting down petrol and diesel consumption and other spending, the spotlight is also on achieving the country's goal of reducing coal imports for power generation. The slew of measures announced by the Assam government to reduce fuel consumption by government departments, including a blanket ban on official and private foreign visits, except in medical emergencies, among others, will not only help curb avoidable expenditure; it is also expected to strengthen the national narrative of disciplined use of resources to strengthen India's economy by reducing its import bill. The austerity pushed by the state government at the administrative level can be supplemented by intensifying the state's rooftop solarisation program to increase its share of renewables in the power grid. Since imported thermal coal accounts for nearly 17 gigawatts (GW) of India's installed power generation capacity, reducing this share can significantly contribute to foreign exchange savings. It is heartening to know that Assam has surpassed the 1 lakh mark in rooftop solar connections under the PM Suryaghar scheme with a combined electricity generation capacity of 310 MW. At a time when every additional megawatt of clean electricity directly offsets the need for coal-based power, this achievement is a meaningful contribution towards reducing India's coal import in addition to meeting the country's climate action goals. One of the key objectives of the Assam Integrated Clean Energy Policy-2025, notified last year, is to facilitate the development of 11.7 GW of additional renewable energy projects with or without energy storage systems in the state, including up to 1.9 GW of rooftop solar projects. The policy envisages achieving the target under rooftop solarisation projects through the installation of 600 MW capacity on rooftops in the residential sector, 300 MW on rooftops of government buildings and 1000 MW on rooftops in the industrial and commercial sectors. Subsidising the installation cost plays the crucial role in motivating people and institutions to go for rooftop projects. Continuation of the subsidy offered by the state government, which would cease to exist, along with the central subsidy, will prove beneficial in achieving the targets. There were initial hiccups in implementing the scheme as most banks, except a few public sector banks, were reluctant to support the scheme and pressed for collaterals from applicants, which led to higher rejections of bank loans for the installation of rooftop projects. The state government managed to overcome this challenge by pursuing this with the banks, and sustaining this effort also requires full cooperation by both public and private sector banks. The banks can play a pivotal role in expediting the rooftop solarisation initiative of the state government by sharing the responsibility, given the current national priorities of cutting down the import bill in all sectors. As the scheme is demand-driven, building awareness among electricity consumers needs to be carried out in a sustained and systematic manner so that more households are encouraged to install rooftop solar systems. The demand in the government sector can be raised through advisories to all government institutions to prioritise rooftop solar projects for their electricity needs so that share of solar power in the electricity grid is increased and demand for coal-power electricity generation is reduced. As the largest share of rooftop solar projects is to be borne by the commercial sector, the demand for it needs to be raised through showcasing the benefits - reduced energy bills and bringing down carbon emissions through cutting down on coal firing in thermal power projects. The appeal by Prime Minister Narendra Modi and Chief Minister Himanta Biswa Sarma can go a long way in motivating the commercial institutions in the state to prioritise installation of rooftop solar projects to achieve the target of building the targeted combined capacity of 1000 MW in the sector. Easing of norms of required bank loans, hassle-free processing of applications, and expeditious disbursement of subsidies are a must to ensure that prospective applicants in the commercial sector do not lose interest due to undue delay in processing of applications and installation of the systems. Alongside the initiative to raise the demand for rooftop installation, expeditious implementation of other solar projects, such as utility-scale solar-powered plants and solar-powered irrigation, both grid-connected and standalone, is crucial to increase the state's share of solar power in the overall country's renewable energy production. Increasing its state's own electricity generation is also essential to reduce its spending on power purchases, which is estimated at Rs 19 crore a day. The projected electricity demand for the state is likely to go up with increasing use of electric vehicles, which has been pushed by both the central and state governments to cut down fuel consumption to power charging points for the EVs. Sustained commitment to rooftop solar and large-scale renewables can firmly place Assam on its green energy path while strengthening India's long term foreign exchange resilience.