Piyush Goyal, the Power and Renewable Energy Minister, reiterated that India`s solar power target -- 100 GW by 2022 -- was achievable, but an IndiaSpend analysis shows that this expansion is challenged by weak infrastructure and a lack of cheap financing.

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To achieve its targets, India must add 130.76 GW of renewable energy over the next six years, an average of 21.7 GW per year or, three times the capacity it added in 2016.

This target is crucial for India in achieving its goal to reduce global warming -- by the year 2100, the earth`s temperature could increase by an average of 1.8 degrees Celsius, in the best scenario, and four degrees Celsius.

In 2016, carbon dioxide (CO2) levels in the world crossed 400 parts per million, levels that will now last our lifetime. The power sector in India produces about half of all CO2 emissions in the country (805.4 million tonnes), according to the power ministry`s Draft National Electricity Plan 2016; coal is the most polluting of all power sources.

In 2015, the world, through the Paris Agreement, agreed to limit the rise of the earth`s temperature to under two degrees Celsius by the year 2100. As many as 162 countries, including India, have submitted their Intended Nationally Determined Contributions (INDC), documents which describe steps countries will take to limit global warming.

As part of its INDC, India has committed to source 40 per cent of its electricity from non-fossil fuel sources by 2030.

In October 2016, renewable energy made up 15 per cent of India`s installed electricity production capacity, up from 13.1 per cent in August 2015, according to government data.

The government`s ambitious target has created awareness about renewable energy. Even companies that do not benefit from government subsidies for renewable energy projects said the push for such energy has made consumers more aware about its virtues.

"More people now recognise that alternative sources can power energy within the household without being connected to the grid," said Piyush Mathur, Chief Financial Officer of Simpa Energy Networks, a company that build small energy grids that power a few households or a village.

But India`s renewable energy targets are "highly optimistic and not realistic", said Vibhuti Garg, a power sector expert at the International Institute for Sustainable Development, a Canada-based environmental non-profit.

India`s 2022 target is equivalent to 22 per cent of the world`s cumulative renewable energy capacity in 2015 -- 785 GW, excluding hydel power projects, according to a 2016 report by the Renewable Energy Policy Network, an international non-profit, based at the United Nations Environment Program.

Over the last quarter of 2016, the government auctioned fewer projects than needed to match its renewable energy goals, according to a report by the Mercom Capital Group, a US-based energy research and communications firm.

In 2015, India invested $10.2 billion of public and private money in renewable energy, about a quarter of the annual investment needed, according to a report by Institute for Energy, Economics and Financial Analysis (IEEFA), a US-based research organisation. Government financing forms only a small part of the total investment. In 2016-17, the government budgeted $758 million (Rs 5,035.79 crore) for renewable energy.

The country needs $100 billion in asset financing for renewable energy over the next six years, according to report by Bloomberg New Energy Finance (BNEF), a London-based energy consultancy.

"The biggest bottleneck we see is financing," said Abhishek Jain, senior program lead at Council on Energy, Environment and Water (CEEW), a New Delhi-based research organisation. "If financing is achieved, the targets are achievable," he added.

The government`s 2016 Renewable Energy Invest Summit -- which brings together financiers, and developers of renewable energy -- has been indefinitely postponed, according to a government circular.

The delay is because renewable energy companies are far away from achieving their committed targets, and because the government is charging a high fee for the event. The delay was because the government needed more time to prepare for the event, a government official who requested anonymity told IndiaSpend.

In the government`s Renewable Energy Invest Summit in 2015, developers and manufacturers of wind and solar energy products and plants committed to nearly 240 GW of renewable capacity addition by 2022, but financiers committed money for only 70 GW added capacity, according to CEEW. 

The government might be underestimating the total investment -- $92 billion (Rs 6 lakh crore) -- required for 175 GW of solar energy, the analysis added, suggesting an alternate higher investment of $120 billion to $147 billion (Rs 7.22 lakh crore to Rs 8.8 lakh crore).

Lenders and equity investors find it risky to invest in renewable energy because of uncertainty about whether publicly-owned power distribution companies will eventually purchase the power generated, regulatory issues related to land acquisition and government clearances for projects, and questions about the capability of India`s electricity grid to manage the extra energy generated, the report added.

"The Indian renewable industry needs to be made attractive enough to invite funds," said Tulsi Tanti, Chairman and Managing Director of Pune-based Suzlon Group, a company that has 9.8 GW of wind installations in India. "Banks and financial institutions should earmark at least 20 per cent finance for renewable energy projects (while providing debt for a longer term of 20-25 years)," he added.

Some changes have helped the sector. For instance, the capital expenditure per watt of solar energy produced has fallen to Rs 60.6 in 2015-16 from Rs 79.7 in 2013-14, and is further projected to fall to Rs 53 in 2016-17, according to the BNEF report.

Still, lowering the cost of debt and equity for capital expenditure will accelerate growth in solar energy, said Jai Sharda, Managing Partner at consulting firm Equitorials, explaining that solar energy is a capital-intensive industry and if the initial cost of setting up the plant is high, the cost of solar energy is pushed up.

The other aspect of financing is paying for energy produced by renewable sources. Solar energy, the backbone of India`s renewable energy targets, is, on average, still more expensive than coal-based energy -- between Rs 4.5 and Rs 5.5 per kilowatt hour for solar compared to between Rs 2.5 and Rs 3.5 for coal.

Further, electricity distribution companies do not always pay for electricity on time, with payment delays being common in Tamil Nadu, Rajasthan, Madhya Pradesh and Maharashtra, according to the Mercom Capital report. 

Infrastructure for parks such as development of access roads, land acquisition for parks, and demarcation of land areas within solar parks, is incomplete, even after bids for projects are completed, which could affect project costs and profitability, according to the Mercom Capital Group report. 

Further, power from sources such as wind and solar is intermittent, and forecasting of energy levels is weak. "We still don`t know how much (electricity) capacity will be available and when," said Garg, which makes it an unattractive venture for power distribution companies to connect to renewable sources.

For instance, "What if it rains continuously for three days?" Garg said, adding that India still does not have reserve electricity capacity that could be used in such situations.

One way out would be to store energy when excess is produced, but storage equipment for solar energy is expensive. 

Another challenge is whether India`s electricity grid has the capacity to take intermittent power surges that will occur because of renewable energy. The grid should also have the capacity to carry power from regions where power is generated to the regions where power is needed.

In 2012, the Indian government said it would build a Rs 38,000 crore green energy corridor to augment existing transmission infrastructure both within and across states. The ministry said it is expected to be completed by 2019.

"For a project that has already had its share of delays and is being touted as the cure-all for grid issues, the renewable energy sector is sceptical if it will get done in time to make an impact," according to the Mercom Capital Group report.

Solar power projects in India have a "must-run" status, which means they should be running at all times possible, given that there is no fuel cost when compared to thermal power projects which use coal.

But solar plant operators were asked to "back down" or stop producing electricity several times, which is a disincentive for companies as they are not paid for the lost energy during that period, according to a renewable energy ministry document in August 2016.

"There is thus need for clear regulations...to enforce must-run status for solar power project (sic)," the document added.

(In arrangement with IndiaSpend.org, a data-driven, non-profit, public interest journalism platform, with whom Shreya Shah is a reporter/editor. The views expressed are those of IndiaSpend.