In the past decade, Renewable Energy in India has witnessed mixed growth curves. While Solar has shown relatively healthy growth year-on-year, wind energy capacity addition has suffered a setback in the recent years, while Biomass and Small Hydro have also seen feeble growth. One of the main reasons for this is the lack of explicit long term vision in state renewable policies and regulations, because of which investors are always skeptic about long term viability of renewable energy projects.
It seems that the new government has been looking at means to enhance the growth of this sector, and are slowly moving in that direction. The government has decided to come up with a Renewable Energy Act that will not only attract investors and further capacity additions, but also look to streamline supply and establish a viable commercial atmosphere through tariffs.
With the recent meetings of the PM of India with business powerhouses of US and the Renewable companies there, it is clear that the Act will proactively encourage more FDI’s into this sector, which already exists up to 100%.
The concrete policy related to the Act would come in place by February next year before Renewable Energy Global Investors Meet and Expo (RE-INVEST) to be organized by the Ministry of New and Renewable Energy. MNRE has also requested the RBI to bring renewable energy funding into the priority sector, so that the funding process can be streamlined along the lines of other priority sectors.
The Act will also emphasize on the development of Off-Grid systems mainly solar roof-tops that will cater to the needs of both the urban and rural populations.
The relevant media article can be read here.