How Renewable Energy Became Price-Competitive With Conventional Power

Solar power resources are more evenly distributed. Yet, most solar capacity addition is seen in the states already rich in windpower.

Renewable energy resources are unevenly distributed across India. Commercially viable wind power capacity was the first to be developed on a large scale in the 1990s, mostly in the western and southern states, thanks to the incentive of accelerated depreciation (AD) that the government offered. (AD is an income tax benefit which allows faster depreciation of assets, reducing the tax burden. In the case of renewable energy, AD rate was 100% earlier, and has now been reduced to 40%. This compares favourably with other machinery, which depreciates at a 15% rate.)

Nearly 83% of all wind installations are in Rajasthan, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Andhra Pradesh and Tamil Nadu. Against the common misconception that wind power is generated mostly in coastal areas, several large wind projects are, in fact, located in the interiors of MP, Rajasthan and Maharashtra. To the contrary, there are almost no wind projects in coastal Odisha.

Solar power resources are more evenly distributed. Yet, most solar capacity addition is seen in the states already rich in windpower. This points to conducive policies and infrastructure for setting up of RE power plants, since wind projects have been running there for close to three decades.

For example, UP and Haryana, historically without RE installations, have only recently developed their RE policies. As a result, only in recent years has solar capacity there started to come up.

Source: business-standard