What Energy Transition Means For Indian Homeowners & Individuals?

Mahindra Susten Secures 300 MW Solar Project From NTPC With Lowest Bid

By-Praveen Raju, Janhavi Joshi, and Amoolya Khurana 

The Government of India highlighted the challenges faced by developing countries to combat climate change at the 2021 United Nations Climate Change Conference (“COP26”) and subsequently presented India’s commitments to the energy transition in the form of Panchamrit i.e., a five-step approach to combat climate change which included its commitment to meet 50% of its energy requirement from renewable energy by 2030 and to achieve net zero emissions by 2070.

A large part of this commitment will involve developing utility-scale projects in the solar and wind sectors while expanding into newer technologies like green hydrogen and battery storage. However, due to their scale, these projects will take time to commission before actual benefits in the form of clean and cheap energy are realised. Our energy experts have brainstormed on what could catapult this transition. One way is to tap into the unrealised potential of micro, small-scale projects and individual consumers, which when aggregated can significantly contribute towards energy transition.

The agriculture sector in India is responsible for approximately 21% of the total greenhouse gas emissions in the country while being heavily dependent on grid electricity for irrigation and harvesting activities. The Government of India launched the Pradhan Mantri Kisan Urja Suraksha evam Utthan Mahabhiyan (“PM-KUSUM”) Scheme in March 2019 to harness the capacity of the agricultural sector to contribute towards climate change. The PM-KUSUM Scheme was issued with the objective of de-dieselisation of the farm sector and enhancing the income of farmers. The Scheme aims to add a solar capacity of about 34,800 MW by March 2026 with a total central financial support of INR 34,422 crore. Under the scheme, farmers can install renewable energy power plants and agricultural solar pumps on their land either directly or through partnerships. The electricity generated may be used by the farmer, supplied to the grid, or both. To further support the scheme, the Reserve Bank of India has expanded the scope of priority sector lending in India to include funding to farmers for installation of solar plants and compressed biogas plants which will enable better credit penetration to finance the costs of developing the projects. However, even with incentives and awareness programmes, farmers have not actively switched to solar-powered irrigation since the scheme was launched. One of the reasons for the lack of success of the scheme may be the highly subsidised and sometimes, free electricity provided to farmers to irrigate agricultural lands. Today, it is imperative to raise awareness of the commercial viability of the scheme and encourage farmers to opt for renewable sources of energy in the long run.

Another sector that is being targeted by the Government is the market for rooftop solar photovoltaic systems. There has also been a major policy push by the Government towards the expansion of rooftop solar systems for residential users. The Government has recently announced the PM Surya Ghar Muft Bijli Yojana in January 2024 with the objective of installing rooftop solar systems in one crore households to reach 40 GW rooftop solar capacity. Under the scheme, the process of installing rooftop solar systems has been simplified for residential consumers through an online portal, fewer approvals, easier contracting and capital subsidies. The residential segment has dominated the total rooftop solar installations in the last quarter and the scheme aims to maintain this pace because the rooftop systems have a lot of untapped potential and can significantly contribute towards changing our energy mix while creating individual self-sufficiency.

India is trying to create an economy that is organically moving towards a renewable future. With the aim to promote a grassroots movement towards clean energy, energy security and conservation, India introduced the Lifestyle for Environment (“LiFE”) movement at COP26. LiFE is a mass movement to make the fight against climate change more democratic by enabling individuals to contribute as per their capacity. An appealing initiative is the Green Credit Rules, 2023 which propose to provide credits for any specified activity delivering a positive impact on the environment. Once the framework for procurement and trading of green credits is established, individuals could earn green credit for, say, tree plantation and trade such credits for monetary benefits.

India, as a collective, has the unique chance to set an example for the democratisation of energy transition and to demonstrate the strength of individual and collective efforts in the fight against climate change. With the issuance of policies and programmes that are specifically aimed at individuals, there is a concerted effort by policymakers to shift the onus of the energy transition from the state to the self, to benefit the environment and also to benefit the individual commercially while contributing to a cleaner economy. The Government’s efforts seem to specifically address the question, “But what can I do?” in hopes that individuals will step up and lead the country to a sustainable future.

The authors of this article are Praveen Raju, Janhavi Joshi, and Amoolya Khurana, Spice Route Legal.