Karnataka Puts an Abrupt Halt to Solar Power

 Total Capacity exceeds 6 GW

The southern states of India have been installing solar energy at a rapid pace driven by their perennial shortages of power seen after independence. The solar energy revolution came as a godsend to these states as they rapidly installed solar power to cover up their power deficits. Telangana, AP, Karnataka and Tamil Nadu have put up huge capacities of solar power as a result of which the country has moved from a power deficit to a power surplus state.

Also, read about the top Solar States in India

However, the rapid growth has had a dark side as the Karnataka energy regulator has called for a halt in any new solar power capacity creation for the next three years. The commission in an order has said that though the prices of wind and solar power were low at INR 2.5 to INR 2.8, the problem is that while the state can get prices of wind and solar for a low cost, they still have to pay the fixed costs for a thermal power plant which they have contracted to. So, the overall cost for the state still works out to be higher putting a greater burden on the electricity consumers on the state.

The solar RPO obligations of Karnataka have already been met until FY 22, as the state has a cumulative capacity of more than 6 GW. This makes Karnataka the state with the highest solar capacity in India easily moving up higher in the ranks than even Rajasthan. Karnataka in recent years had started a number of schemes to promote solar energy such as the solar parks scheme with Pavagada solar park expected to become one of the largest solar parks in the world with a capacity of almost 2 GW when completed. It had started a small solar power plant scheme for farmers besides solar power plants being auctioned in different districts.

This development has alarmed solar power developers who fear that this trend may be followed by other states which are reaching saturation in terms of renewable power capacity. Andhra Pradesh has also installed large capacities of both solar and wind power in recent years. TN already has one of the largest capacities of wind power in the world with more than 10 GW of wind capacity. It could soon announce a complete halt on large scale RE projects. With the government targeting 175 GW of RE capacity by 2022, this development does not bode well if one of the largest demand drivers of solar capacity stops working on new RE capacity till 2022.