By: Staff Writer
March 27, Colombo (LNW): The Sri Lankan government’s recent decision to reduce the purchasing rates for renewable energy has raised concerns that it may inadvertently benefit private diesel power suppliers linked to the national grid. This move has ignited widespread debate, as it threatens to deter investment in renewable energy while making costly and environmentally damaging fossil fuel-based power generation more appealing.
The reduction in tariffs for renewable energy sources such as solar and wind has created uncertainty among investors and energy producers. Many renewable energy companies had relied on stable tariffs to ensure the viability of their projects. By lowering these rates, the government risks slowing down the transition to clean energy, which is essential for energy security and sustainability.
Critics argue that this decision could favor private diesel power suppliers who provide electricity to the national grid at significantly higher rates. Diesel power is not only expensive but also contributes heavily to environmental pollution. Lowering the tariffs for renewable energy might make diesel power more financially attractive, increasing dependence on fossil fuels instead of promoting cleaner alternatives. This policy shift appears to contradict Sri Lanka’s commitments to reducing carbon emissions and advancing sustainable energy initiatives.
Industry experts caution that reducing incentives for renewable energy could discourage both local and foreign investors from entering the market. Sri Lanka possesses considerable potential for solar and wind energy, but policy inconsistencies may hinder its expansion. Investors seek regulatory stability, and sudden changes to tariff structures can deter long-term commitments. A decline in renewable energy investments could lead to energy shortages and an increased reliance on costly energy imports.
Renewable energy advocates have urged the government to reconsider its stance and restore fair pricing mechanisms for clean energy. They emphasize that fostering renewables is crucial not only for environmental protection but also for economic stability. Maintaining competitive tariffs would attract investment, create jobs, and reduce dependency on fluctuating fossil fuel markets.
Sri Lanka has previously made significant progress in renewable energy adoption, and reversing these achievements could have lasting negative consequences. The government must carefully assess the implications of its policy change to ensure alignment with both national and global sustainability objectives. Encouraging the expansion of renewable energy should be a priority to safeguard economic growth and environmental well-being.
In addition to broader concerns, the Electricity Consumers’ Association (ECA) has warned that the tariff revision for rooftop solar panels could severely impact Sri Lanka’s solar industry. With over 600 to 700 active solar panel businesses and approximately 20,000 employees in the sector, the reduction in tariffs may lead to job losses and financial instability. Many solar panel owners could struggle to repay loans and manage maintenance costs, potentially leading to the collapse of small-scale solar businesses.
ECA General Secretary Sanjeewa Dhammika expressed fears that this decision could result in a daily loss of around 250 megawatts of renewable energy that would otherwise be supplied to the national grid. He also speculated that this move might push the government toward costly emergency electricity purchases and increased reliance on liquefied natural gas (LNG), potentially raising long-term electricity prices for consumers.
When questioned, Ceylon Electricity Board (CEB) Chairperson Dr. Tilak Siyambalapitiya stated that the matter is under the jurisdiction of the Ministry and the Cabinet, as outlined in the Electricity Act. Meanwhile, Energy Minister Kumara Jayakody has yet to respond to concerns raised by stakeholders.
Under the revised policy, the payment structure for rooftop solar energy producers will change based on the system’s capacity. While the current rate is Rs. 27 per unit, the new rates will be Rs. 19 for systems generating less than 20 kilowatts (kW), Rs. 17 for systems producing between 20 kW and 100 kW, and Rs. 15 for systems generating between 100 kW and 500 kW.
This policy shift has sparked uncertainty in Sri Lanka’s renewable energy sector, with stakeholders urging the government to reconsider its decision to maintain the momentum of the country’s clean energy transition.
