May 2020

Reduced power demand, temporary suspension of manufacturing operations, delays in project commissioning, difficulties in carrying out operations and maintenance work, logistical bottlenecks, a working capital crunch, and health risks are some of the key challenges that have impacted the renewable energy sector. But that has not taken away from the sector’s promise. Energy sector experts have increasingly started to believe that the coronavirus pandemic may accelerate a shift from fossil fuel spending to investments in renewable energy, a theory now supported by global organisations including the International Energy Agency and think tanks such as the World Resources Institute.

To its credit, the government has been taking several measures to address the challenges brought upon the sector by the Covid-19 crisis. Project deadlines have been extended. Must-run status for renewable energy plants has been reinforced. Domestic manufacturing is being promoted to secure the future supply chain. New tenders continue to be issued by various nodal agencies, though with extended deadlines. New project types (for instance, 24×7 power supply from renewables) are emerging, lending greater confidence to discoms to procure solar power vis-à-vis conventional power.

However, there are several lessons that the solar power segment can learn and carry forward once the crisis has passed and the industry has had a chance to analyse its response. The crisis has made it pertinent for stakeholders across the solar value chain to reshape their strategy for business continuity, communicate with relevant stakeholders, maximise the use of government support policies and build resilience in preparation for the new normal.

Policymakers, on their part, will need to take both short- and long-term measures to ensure that the favourable nature of renewable energy is taken on board more seriously than ever before. Steps such as a policy boost to encourage domestic manufacturers will protect individual states from external disturbances. Support in the form of a moratorium on loans, pass-through of cost increases for developers, digitalisation for better assessment and ease of transactions could also be considered by policymakers to help overcome the project disruptions.

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