Solar Park Challenges India

India’s solar park scheme has been touted as a unique successful policy to promote the development of solar power as it creates a dedicated readymade infrastructure for large solar power plants. The sharing of infrastructure between large solar projects is assumed to reduce costs for developers. The problem of land and transmission is also solved.

Given the initial success of the scheme, the government of India had raised the target for solar park capacity from 20 GW to 40 GW by 2022. Solar parks have witnessed rapid fall in tariffs and interest from foreign developers who often fail to navigate the regulatory processes and approvals for land banks. However, the solar parks are now encountering a number of hurdles which is stopping their progress. High solar park charges by a few states is making it difficult for developers to stick to the low tariffs. There are other major issues with the development of solar parks such as the building of transmission and evacuation facilities, which can take a long time to develop, leaving the solar developers in the lurch as they have to meet the 12-24 months deadline for developing their solar power plants.

Also, read the Indian Government Incentivizes States for Solar Park Land

Some solar parks in India are facing issues in the leasing of land because farmers think that it is not a good deal for them. Negative environmental and social impact of large projects has also become a major issue. On the other hand, some states such as Telangana have tasted success without solar parks. They have allocated projects near their transmission substations in lower sizes. This allows them to save money on building expensive transmission lines from solar parks to their distribution and transmission networks.

The government of India in its KUSUM scheme also wants to develop around 10 GW of small solar power plants of 0.5-2 MW size near distribution utilities’ substations. There is now a blowback from the ecosystem on large solar parks as it benefits the larger developers without benefiting the other stakeholders. While the tariffs have come lower for solar parks, there are a number of teething issues being faced by investors, the government and the people who have given their land.