SL’s Renewable Energy Sector: No clear direction
Sri Lanka’s renewable energy (RE) journey has seen moments of great promise, but today it finds itself in limbo. The lack of a clear policy framework and implementation mechanism has left the solar industry, once a beacon of progress, struggling to survive. The government’s shifting stance on feed-in tariffs (FIT) has created uncertainty, discouraging both households and investors from moving forward.
FIT Rollercoaster
In 2016, the Suriya Bala Sangramaya programme opened the door to residential solar adoption. Momentum peaked during 2022–2024 when FIT rates were set at Rs. 37 per unit, encouraging widespread participation. This, however, was short-lived. The rate was soon reduced to Rs. 27 and in the most recent policy adjustment, daytime export FIT has been slashed further to Rs. 19–20 per unit. To offset this, the government announced a higher FIT of Rs. 45.80 for evening peak exports, but crucially, the policy framework and operational mechanism to implement this are yet to be introduced. As a result, the industry remains stalled, with thousands of potential consumers and investors left waiting.
Sector in Limbo
The absence of clarity is more damaging than the tariff reduction itself. Without a mechanism to channel solar exports into the evening peak, households cannot optimise the use of solar plus storage. This uncertainty has caused the RE industry to grind to a halt, a dangerous setback at a time when Sri Lanka needs to accelerate towards its 70 per cent renewable energy target by 2030.
Learning from Australia
Australia provides a striking example of how policy clarity and targeted incentives can transform the market. The introduction of battery subsidies, coupled with Time-of-Use (ToU) tariffs, immediately encouraged households to adopt solar plus storage systems. Within a few years, average household storage capacity grew to nearly 30 kWh, tripling what is typically seen in developing nations. The policy ensured that stored solar energy was used during evening peaks, maximising consumer benefit while reducing grid strain.
Way Forward
Sri Lanka does not necessarily need heavy subsidies to achieve the same results. A transparent and timely policy framework, coupled with duty concessions for battery imports and local assembly, can enable the country to leapfrog into the solar plus storage era. Announcing the operational framework for the evening peak FIT without delay will be the single most important step to revive the sector. Doing so will restore investor confidence, encourage household adoption, and ensure that the RE industry contributes meaningfully to energy security.
The message is clear: without decisive action, Sri Lanka risks losing momentum in its renewable energy transition. With the right policy signals, however, the country can still make solar plus storage the cornerstone of its 2030 renewable energy target.
(The writer is an Innovator and Patent holder for Energy Storage Systems (ESS). He can be reached at jeremyF@smarthome.lk).
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