Government has decided to come up with a Renewable Energy Act to streamline power generation, supply and tariff and help attract more investment.
The concrete policy related to the Act would come in place by February next year before Renewable Energy Global Investors Meet and Expo (RE-INVEST) to be organised by the Ministry of New and Renewable Energy.
"We are planning to enact a Renewable Energy Act as currently all the electricity activities come under the New Electricity Act 2003. It is a big challenge. When there is no policy or a renewable energy act, investors do not come as they want a long term protection.
"Giving that to them is very essential. So before the Re- Invest event we will try to form the National Renewable Policy or Act and bring in the Union Cabinet," Upendra Tripathy, Secretary, MNRE told a press conference.
He said the Ministry has also requested the RBI to bring renewable energy funding into the priority sector
Currently, 60 countries in the world have an act related to New and Renewable Energy.
The act will not help in streamlining many aspects related to the renewable energy sector like power generation, supply and tariff, but also help attract investment.
"Credit has to come. Capital has to be made cheaper. A proper policy will help attract investors. We aim to produce 1 lakh MW in the next five year. The sector currently requires an investment of 40 billion USD, but it gets only 6 billion USD," Tripathy said.
He said the US visit of Prime Minister Narendra Modi could also see investment pouring into this sector.
Foreign Direct Investment upto 100 per cent under the automatic route is permitted in the Renewable Energy sector.
Emphasising on off-grid solutions and making use of space available on rooftops, Tripathy said the government wants to make it as a movement.
"We are negotiating for a loan of 1 billion Euros, a soft loan with KfW (German government-owned development bank) and if that comes, that will be exclusively for rooftops," he said.