BS Samriddhi: Rajasthan's solar sector doesn't need incentives to grow

The panel discussion was attended by Sunil Bansal, President Rajasthan Solar Association, Rahul Gupta, Founder MD and CEO, Rays Power Experts Ltd and Nitin Agarwal

The sunrise solar sector in Rajasthan does not need incentives to survive and grow, on the contrary, incentives and subsidies breed bureaucratic bottlenecks and delay execution, said panelists at a panel discussion on “Energy: The Surging Renewables Sector”. The discussion was held as part of Business Standard Samriddhi-Rajasthan 2025.

 

Business Standard launched its 14th English and 7th Hindi edition from Jaipur on Wednesday.

 

The panel discussion was attended by Sunil Bansal, president of Rajasthan Solar Association; its CEO Nitin Agarwal; and Rahul Gupta, founder managing director and chief executive officer (MD&CEO) of Rays Power Experts Ltd.

 

“The structure of the incentives and their disbursement also need to be transparent, quick, and smooth,” Bansal said.

 

He said that today Rajasthan has become a preferred destination for solar projects, and is now known as the “Solar capital of India”. “But beyond the hype, we should also understand that the full potential of the sector is not being harnessed to the hilt,” he added.

 

This is because though Rajasthan is leading in terms of production of solar energy at 32 Gw, yet when it comes to manufacturing of equipment that go into making a solar project, it lags far behind states like Gujarat.

 

“Rajasthan today has just two major solar equipment manufacturing companies while Surat has more than 50. When Rajasthan had just one, Surat too had one unit. So, in short, other states have come a long way when it comes to setting up a base for solar equipment manufacturing but we in Rajasthan are lagging in this,” Bansal said.

 

He said that real employment will come when solar equipment manufacturing starts in a big way in Rajasthan as generating units won’t give large employment. 

 

Gupta said that the reason why manufacturing for the solar sector has not picked up in Rajasthan in the same way as it has done in Gujarat is that the state started open access way back in 2012-13 while in Rajasthan it was started in 2017 onwards.

 

“Overall, the industrial scenario in Gujarat was ahead of Rajasthan by five-seven years, and their producers were able to price the power themselves which is now starting in Rajasthan,” Gupta said.

 

He said though solar equipment manufacturing in Rajasthan has been lower than states such as Gujarat, yet it is picking up in sectors such as battery storage. With power prices going down in the state, a lot of investment will come in manufacturing as well, he added.

 

Agarwal said India has a total solar target of 500 Gw by 2030, of which Rajasthan’s share is 125 Gw (that is around 25 per cent). The state at present has installed solar capacity of 38 Gw, which means that by 2030, this installed capacity needs to be tripled.

 

All the 125 Gw solar projects to come on stream would mean a cumulative investment of almost ₹5 trillion in the state, he added.

 

Agarwal said of the ₹30 trillion of investments signed in recent “Investors Meet” in the state, almost ₹28 trillion has come in the renewables sector alone.

 

“Rajasthan alone has the potential to generate 300 Gw of solar energy. This potential is huge and it needs to be tapped fully,” Agarwal said.

 

He said battery storage is challenging for the solar sector but here too Rajasthan is leading the way, with the central government allocating 10,000 Mw of battery storage capacity, which is the highest in the country. Of the 10,000 Mw, tenders have been floated for 2,000 Mw.

 

Bansal said that tariff is a big issue in the solar sector. The government needs to understand tariff fixation has to be transparent and industry-friendly. It should not think of recovering its incidental costs through tariffs.

 

Gupta said that from the producers’ side, tariffs are not a problem, and due to certainty in policy, disputes between distribution companies (discoms) and power producers have come down.

 

Agarwal said that one big factor that stops the growth of the household solar sector is that “we give lots of free power to consumers” but don’t want to incentivise the sector.

 

“We conducted a study and found that Rajasthan has 11 million power connections, of which almost 8 million pay zero bill. This needs to stop. We can use the money saved through this for incentivising solar power, which is clean and green as well,” he said.