New Delhi: Instead of giving subsidies on kerosene, if the government starts subsidising off-grid solar energy, India will be able to cut its ballooning subsidy bills, improve electricity access for households and mitigate indoor pollution, a joint study by The Energy & Resources Institute (TERI) and Canada-based International Institute for Sustainable Development (IISD) has said.
The study notes that despite the success of the Saubhagya scheme or Pradhan Mantri Sahaj Bijli Har Ghar Yojana, households in India still rely on kerosene for domestic lighting. Besides causing indoor pollution, kerosene could also trigger a fire. It advocates making off-grid solar energy available to households directly, through manufacturers or as subsidised credit through financial institutions.
The benefits of switching subsidies
According to the study, switching subsidies to solar would significantly cut down fiscal and household expenditure. Off-grid solar products are far cheaper than kerosene over the lifespan of the technology, the study said.
“Over the lifetime of the products, solar lanterns, home systems and micro-grids are all cheaper than the combined household and government expenditure on kerosene. The government could actually save money by switching support to solar energy,” said Balasubramanian Viswanathan, IISD Associate and co-author of the study.
It could save govt Rs 129 in subsidies per household, per month!
A cost analysis done by the study showed that if kerosene as a lighting source is swapped with a solar lantern, it could save the government Rs 129 per month on each household. In case the government substitutes unclean energy source with solar home system and micro grid respectively, it would save Rs 41 per month and Rs 37 per month on every household.
How much did govt spend on subsidies?
In the financial year 2018-19, the government spent over Rs 46,000 crores on subsidies for cooking gas and kerosene, which exceeded the initial Budget Estimates for 2018-19 by 84 percent. A continuation of the subsidy on kerosene risks high and unpredictable costs in periods when oil prices escalate.