Alleging large-scale complicity by the Union government in promoting centralised solar power plants to favour private businesses at the cost of taxpayers, State power utilities and electricity consumers, EAS Sarma, former secretary to the government of India (GoI), had demanded a judicial enquiry in this matter.
Mr Sarma, former power and finance secretary, in his letter to Cabinet secretary TV Somanathan, says, "The whole range of lop-sided policy decisions taken to help big businesses to profiteer at the cost of the public seems to be part of a well-orchestrated scam that calls for an independent judicial enquiry. Such an inquiry is necessary, as already suggested, to examine the policy asymmetries that enriched private solar companies, to assess the magnitude of undue costs imposed on millions of electricity consumers and to evaluate the fate of the tax-payers' funds diverted to subsidise private promoters of solar plants, so that the Parliament and the public may get to know how the Union government and the states have placed the interests of private corporate entities over and above the public interest."
In his strongly-worded letter, Mr Sarma says the government’s policies have led to a 'scam-like situation' where 44GW (gigawatts) of highly expensive renewable energy capacity remains without takers, while subsidies worth tens of thousands of crores of rupees have been handed to private promoters.
“The all-out promotion of private solar power generation plants is kept alive by the Union government through subsidies in different names, tax concessions and a highly unreasonable must-buy obligation imposed on state DISCOMs (power distribution companies),” Mr Sarma wrote, warning that ordinary consumers were being forced to shoulder a massive financial burden.
Citing a recent Down To Earth report, the former bureaucrat pointed out that India currently faces a paradox: 44GW of renewable power capacity is available but remains stranded due to the absence of power purchase agreements (PPAs), high costs, storage issues and weak demand.
He questioned why ministries and regulators allowed such large capacity to come up despite its prohibitive costs and whether they deliberately ignored cheaper, decentralised alternatives like rooftop solar and agricultural pumps.
According to Mr Sarma, the Union government has already doled out more than Rs35,000 crore in subsidies under schemes like the production-linked incentive (PLI) and viability gap funding (VGF). He flagged the allocation of Rs9,000 crore of public money to cover 40% of the capital costs of private storage systems, calling it 'a euphemism for outright subsidy'.
He also criticised the 'deemed generation' clauses in long-term PPAs that compel DISCOMs to pay private developers even when no electricity is generated. “Every such opportunity for a private company to enrich itself has imposed a corresponding cost on the taxpayer or the consumer,” Mr Sarma says.
The letter highlighted mega solar parks being developed by Adani Green Energy Ltd (AGEL) and Reliance Industries Ltd (RIL) across thousands of hectares of land near India’s western border. These projects, he argued, not only come at an enormous public cost but also carry security implications.
Mr Sarma also referred to US court proceedings and Securities and Exchange Commission (SEC) charges against the Adani group, alleging bribery and fraud and accused Indian regulators and investigative agencies of deliberately avoiding action.
By his estimates, even a Re1 per unit increase in tariffs from costly solar purchases translates into a transfer of Rs33,000 crore annually from domestic consumers to corporate coffers. This is in addition to explicit subsidies.
“While a farmer could set up panels on his own premises to save costs, the lop-sided policy of the NDA government has placed greater emphasis on forcing consumers to buy more expensive solar power from distant locations chosen by big businesses,” Mr Sarma says.
The former secretary warned that by locking into costly technologies today, India was closing its future options to benefit from rapidly falling solar and storage costs globally.
He urged the Cabinet secretary to immediately institute a judicial inquiry, and marked copies of his letter to market regulator Securities and Exchange Board of India (SEBI), central bureau of investigation (CBI) and directorate of enforcement (ED), calling on them to investigate.
Maharashtra is the worst State with COUNTRY HIGHEST Ekectricity Charges paid by Middle Class Households consuming between 101-300 units !