Industry players call for new funding avenues
While India remains one of the most attractive markets when it comes to renewable energy, the industry needs a better regulatory environment and clarity on policies, industry players argued at the CII partnership summit in Mumbai on Sunday.
“I think renewables is one industry in India where you have tariff capping coupled with reverse auction,” said Sindoor Mittal, Vice-Chairperson, Avaada Group. She said it is time the government goes back to closed auctions of renewable energy projects as the space is competitive enough to get best tariffs.
Industry players also said the confusion around GST slabs for solar, which was clarified by the Goods and Services Tax (GST) Council only in the end of last year, had impacted the industry.
The safeguard duty is another issue that developers should not be facing in India if the country wants the renewable sector to grow, Ramesh Subramanyan, CFO of Tata Power, said.
Pradeep Kheruka, Chairman of Gujarat Borosil Ltd, said that while Indian manufacturers are not just as competitive as Chinese but have even better technology and manufacturing efficiency, factors like cost of electricity and land, among other things, make their costs higher.
The industry players argued that having capital subsidy for solar-related manufacturing has been discussed for years but has never seen the light of day as a separate policy. This could give a boost to solar manufacturing as many players would be ready to take it up.
Financing of the sector is another issue slowing down the growth of the renewable industry. Both bank and NBFC financing has dried up, Subramanyan pointed out, as a result of NPA burden and overexposure to power sector in general, especially in the case of public banks.
Mittal suggested that India’s pensions funds and insurance companies could take the example of global peers that are actively investing in the renewable sector, which provides them low yield but guaranteed return. Having long-term investors like pension fund and insurance companies could open up new financing avenues for the sector, she added.