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Govt officials scheming to reduce unit cost offered to rooftop solar power suppliers, industry reps warn

ECONOMYNEXT – A group of high-level government officials allegedly in cohorts with the “diesel and coal mafia” are planning to reduce the unit cost of electricity offered to rooftop solar power, a collective of solar power industry representatives said.

The move will immediately bring the solar rooftop industry to a standstill, resulting in a large number of job losses, and bring in major barriers to achieving the government’s policy of 80% renewables by 2030, a statement released by the Solar Industries Association warned yesterday.

“We have reason to believe a group of officials supporting the diesel and coal mafia are attempting a conspiracy to disrupt local entrepreneurship in the solar industry and to change the government policy in a subtle way so that they can bring in long term emergency power, at a huge cost to the country. The solar rooftop industry has thus far created 25,000 local entrepreneurs and has created over 10,000 job opportunities, together with economic development of over LKR 40 billion,” the statement, signed by SIA Secretary Lakmal Fernando, said.

Referring to a comment by an unnamed energy expert that the CEB has to increase the electricity tariff unit by nearly LKR 6 per unit to cover the current losses, the SIA statement said: “We want to point out that the CEB can drastically reduce losses in the future by cutting the high cost coal and diesel power generation and increasing the solar powered electricity generation in the country.”

The protection and promotion of the solar power industry will save the country extensive amounts of foreign exchange, and can turn the consumer into a producer (Producer/Consumer) which is essential to the future benefit of the general public and the country, the SIA went on to say, adding that Sri Lanka is not fully exploiting all available opportunities to achieve the country’s solar energy targets due to continued obstacles from various lobbies.

“We would request the government to pay close attention to this issue and save the future of the solar industry,” it said.

The SIA also called for the addition of 200 MW of rooftop solar to the national grid per year to achieve the 80% by 2030 target.

“Currently, 25,000 solar systems supply 270 MW to the national grid. According to government policy, the country should build at least 200,000 rooftop solar power plants adding 2GW within the next 10 years to support the overall target and add another 3GW of power through ground-mounted solar power plants. The aim is to increase the solar powered energy to 5GW by 2030 from 320MW as of now,” the statement said.

According to the SIA, only 270MW of rooftop solar systems and 62 MW of ground-mounted systems have been added to the national grid from 2016 to date.

“Growth at this slow pace will not be sufficient to meet the target set for 2030. Therefore, capacity addition to the grid from solar power should be increased to 200 MW annually, starting from 2021,” it said.

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In addition to removing all obstacles for renewable energy, the SIA called for speedy resolutions to the following issues:

  • Delays in approving applications for rooftop solar power
  • Obstacles rooftop solar owners face when apply for loans for solar power
  • Assessment charge of Rs 15,000+ when applying for solar power system loans under the ADB loan facility
  • Prioritising coal and diesel energy

“Sri Lanka spends LKR 22.50 per kilowatt to generate electricity using coal and LKR 37.12 per kilowatt for diesel and oil powered electricity. Global trends clearly show that these prices will increase in the coming years. Seventy percent of Sri Lanka’s total energy cost is paid back to foreign countries as we rely on fossil fuel imports for energy. The Ceylon Electricity Board (CEB) only spends LKR 19.80 per unit to buy rooftop solar power from Sri Lankan citizens. This will create no burden for the economy and will not affect the exchange rate as the money is circulating within the country.”

In 2020 alone, the SIA further said, LKR 17.62 was saved per every unit of oil-fired energy replaced by rooftop solar, resulting in LKR 6.3 billion/USD 34 million in foreign exchange saved.

Noting that the CEB will be able to purchase a unit of land-based large-scale solar power for nearly LKR 10, the SIA statement said the board’s losses over the past years due to imported fossil fuel could have been avoided by developing solar power.

This will have an impact on the entire economy, the statement said, as the CEB stands to lose the opportunity to generate low cost energy from 2GW solar rooftop plants in the next 20 years due to the heavy reliance on fossil fuel-based plants. (Colombo/Jul10/2020)

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