By: Staff Writer
April 04, Colombo (LNW):Sri Lanka’s renewable energy sector stands at a critical juncture, as industry experts voice serious concerns over ongoing policy inconsistencies, bureaucratic inefficiencies, and deliberate roadblocks that continue to hamper the country’s clean energy transition.
At a recent press briefing, key industry figures—including Dr. Lakmal Fernando of the National Chamber of Commerce, renewable energy expert Dr. Vidura Ralapanawa, and engineers Prabhath Wickramasinghe and Parakrama Jayasinghe—called for urgent reforms to revive investor confidence and ensure long-term energy sustainability.
The experts highlighted a string of pressing issues. Chief among them was the government’s withdrawal of the ‘Net++’ scheme, which previously allowed commercial producers to export excess solar power to the national grid.
This move has significantly impacted the return on investment for solar projects and discouraged future expansion. According to Dr. Fernando, over Rs. 100 billion in bank loans are now at risk due to policy reversals, while more than 60,000 jobs in the solar industry face uncertainty.
Tariff-related instability also remains a major concern. The abrupt cut in solar feed-in-tariffs—from Rs. 42 to Rs. 27 per kWh—was cited as a critical blow to project viability. Investors were further shaken when the government retroactively adjusted 2023 tariffs, demanding refunds for so-called “overpayments.”
Dr. Ralapanawa also criticized the decision to eliminate the variable tariff mechanism by 2025, exposing investors to greater currency and interest rate risks. He warned that continued policy backtracking could cost Sri Lanka $1.2 billion in potential climate financing, as highlighted in a recent World Bank report.
The experts alleged that vested interests within the Ceylon Electricity Board (CEB)—referred to as the “CEB Mafia”—have systematically obstructed renewable integration to protect fossil fuel-based power generation. Ad-hoc power curtailments, informal notices, and grid inefficiencies were all pointed to as examples of sabotage.
The national grid’s inability to integrate renewables was dramatically exposed during the February 2025 blackout, initially blamed on solar energy. Investigations later revealed that the real cause was technical failures at the Victoria power plant. Dr. Ralapanawa argued that the absence of Battery Energy Storage Systems (BESS)—despite being part of Sri Lanka’s Long-Term Generation Plan—has worsened the grid’s instability.
The CEB’s refusal to settle dues with renewable energy suppliers, despite enjoying higher revenues than the country’s top exporters, was also condemned. Engineers Jayasinghe and Wickramasinghe warned that the lack of investor safeguards, combined with constant policy shifts, is making renewable energy projects unbankable.
Despite these setbacks, solar energy now contributes 12% to the national energy mix and continues to be the cheapest option after major hydropower. Yet Sri Lanka still depends on fossil fuels for over half its electricity needs, spending more than $5 billion annually on fuel imports—an unsustainable trend, experts say.
