Free electricity vs solar subsidy stalls green transition in Karnataka

India announced at the UN Climate Change Conference in Glasgow (COP26) in 2021 that it would reduce the use of conventional energy sources and increase its power-generation capacity through non-fossil energy sources to combat greenhouse gas emissions. India vowed to become a net-zero-emitting country by 2070.

The Union government has initiated several programmes aimed at achieving the goal of combating global warming. One such initiative is the increased use of solar energy to generate power. However, the improper agreements between the state and Union governments, along with myopic welfare schemes, are obstructing India’s progress towards this goal. Karnataka's current situation is evidence of an uneven journey towards the larger goal.

Uneven journey in Karnataka

The Union government gives a subsidy of up to Rs 78,000 for installing solar panels of up to 3 kW under the PM-Surya Ghar: Muft Bijli Yojana. The subsidy is aimed at encouraging consumers to get up to 300 units of free electricity per month. However, to enjoy the free electricity, a consumer has to spend around Rs 1.47 lakh, as the total project cost for a rooftop solar installation comes to nearly Rs. 2.25 lakh.

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Paying the remaining amount for installation is difficult for many people. Moreover, the state government's existing scheme of free electricity for the first 200 units has caused people to rethink the Union government's scheme. The state government's Gruha Jyothi, the free electricity scheme, burdens its exchequer by Rs 10,100 crore.

While the Union government promotes solar panels, the state government is offering 200 units of free electricity. As a result, people are disinterested in the central scheme because it requires their own investment.

Uncertain financial situation

This looks good on the surface. However, it’s unclear how long the state can continue the 200-unit free power scheme — it depends on the state’s financial situation. The government is already taking loans to fund its five guaranteed schemes.

A consumer who opts for the Central scheme must first apply on the national portal. Then, a list of approved solar agencies will appear. The consumer can select one, pay their share, and after installation, the subsidy amount will be directly credited to their bank account. There is no middleman.

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A subsidy of Rs. 78,000 will be directly deposited into the consumer’s account for a 3 kW rooftop solar setup.

The Union government plans to spend Rs 75,000 crore to support 1 crore households. Generally, a home needs only 2 kW of power, but since the subsidy is for up to 3 kW, people prefer that. Solar panels last for about 25 years, so their initial investment will pay off over time.

If the state government joins hands with the central scheme, solar energy adoption can increase. If the state also gives Rs 78,000 as a subsidy along with the Centre, the consumer will only have to pay the remaining amount. In return, the government can use 1 kW of the generated power. The government’s investment would be recovered within two years through the electricity produced.

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In contrast, giving 200 units of free electricity provides no benefit to the government. In fact, it leads to the misuse of free power. Encouraging rooftop solar instead will reduce the power loss of distribution companies and improve their financial health. The central and state governments are like two oxen pulling the same cart — if one moves more slowly, the cart cannot move straight. Both must work together.

Solar power production in India

Karnataka ranks third in the country in solar power production. Rajasthan tops the list with a production of 23 GW of solar power, followed by Gujarat with 10.13 GW, and Karnataka with 9.05 GW.

Karnataka is home to one of the largest solar parks at Pavagada, which produces 2,000 MW of energy. No other place has such a large solar setup in one location.

By 2030, India aims to generate 292 GW from solar. In the future, solar, wind, and hydro energy combined will supply about 50 per cent of the country’s daily power demand. That means coal use will decrease by 50 per cent, and carbon emissions will also drop.

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It is to be noted that Karnataka already meets about 50 per cent of its electricity needs from solar energy.

Flawed power transmission plan

The problem now is not generation but transmission — the power grid capacity must be increased to handle more solar energy.

Under the Union Government’s Kusum-C scheme, support is provided to build a separate grid for solar power. Karnataka should make better use of this opportunity.

If more solar panels are installed near existing power lines, electricity can be supplied easily through the same grid. However, solar power is only available during the day. After 6 PM, when the sun sets, solar generation stops, and the grid can become unstable. The grid must maintain a steady 50 Hz frequency, which is not easy. Therefore, alternative power sources must be ready when solar generation stops.

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The solution is to store extra daytime power in batteries. Though costly, this prevents grid failures.

Pumped storage, an alternative

To resolve the issue, “pumped storage” can be seen as a viable alternative. Pumped storage is a technology that uses hydroelectric dams to store energy. The Sharavathi Valley project aims to generate 2,000 MW this way. The state government has begun work on it, although some environmental concerns exist.

Since Sharavathi power is already cheap, pumped storage will not be very expensive. Many are suggesting similar systems at other hydropower stations.

As solar power increases, the grid also needs upgrading — otherwise, it will be difficult to utilize all the generated power. Already, electricity purchase rates are falling — solar power costs only Rs 2.50 per unit in the open market. Hence, the priority should be on improving transmission and storage.

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To reduce pressure on the grid, consumers should be allowed to generate and use their own solar power independently. If used widely in Karnataka, it will reduce the load on the grid.

When power is supplied through the grid, 11–15 per cent loss occurs. This adds unnecessary cost to consumers and power companies. However, the rooftop solar panels remove this issue.

Gujarat is leading in rooftop solar power generation with 4,984 MW, followed by Maharashtra with 3,034 MW, Rajasthan with 1,483 MW, while Karnataka is still at 683 MW. The main reason is the state government’s slow response. Other states, though they do not offer free power but still encourage rooftop solar strongly. Karnataka too should follow that approach.

Future of solar power

The Union government estimates that using just 3 per cent of India’s barren land for solar generation could solve much of the power shortage. Apart from Rajasthan, Karnataka has the most barren land. Karnataka has about 13,536 sq km of barren land — enough to meet 50 per cent of the state’s total electricity demand through solar power.

Every square metre can produce 4–7 kWh of solar power daily. To achieve this, the Union and state governments must work together. When they collaborate, the result will be true progress.

(This article was originally published in The Federal Karnataka)