Nepal is once again facing an electricity crisis. While the Nepal Electricity Authority (NEA) and the energy ministry offer differing opinions, both agree on one fact: there is a shortage of electricity.
Industries are the immediate victims as NEA prioritizes household supply. This approach contrasts with countries like India, which are strengthening domestic industries by ensuring energy security. Nepal’s growing energy demand, combined with its aim to export more electricity to India, highlights a contradiction—it cannot meet its own needs while trying to sell power abroad.
Hydropower Dependency and Solar Neglect
Nepal has long focused almost entirely on hydropower. While valuable, hydropower development is slow, expensive, and affected by environmental challenges. Solar power, in contrast, is faster to deploy, increasingly affordable, and perfect for Nepal’s geography.
Despite having the potential to generate up to 50,000 TWh of solar energy annually—about 7,000 times more than current consumption—Nepal’s installed solar capacity remains around just 55 MW, contributing barely 1% of the total power supply. This shows a clear underutilization of an abundant resource.
India’s Solar Leap vs Nepal’s Stagnation
India’s solar sector has grown rapidly, crossing 73 GW of installed capacity in 2024 with a goal of 280 GW by 2030. Backed by strong policies and global initiatives like the International Solar Alliance (ISA), India is reducing fossil fuel dependence, creating jobs, and attracting global investment.
Nepal, with its close ties to India, stands to benefit from this energy shift. India plans to import 10,000 MW of power from Nepal in the next decade, but for Nepal to meet both domestic and export needs, it must diversify energy sources beyond hydropower.
Why Solar Energy Makes Sense for Nepal
- Faster deployment: Solar projects can be set up quicker than hydropower.
- Energy diversification: Reduces over-reliance on season-dependent hydropower.
- Job creation: Solar development can boost employment in installation and maintenance.
- Cost-effective: Global solar prices are dropping, making it more affordable.
Policy Gaps and What Needs to Change
Nepal lacks a strong solar energy policy. To fix this, the government should:
- Offer tax breaks and investment incentives for commercial solar projects.
- Establish fair feed-in tariffs and power purchase agreements (PPAs).
- Modernize the grid and support energy storage systems.
- Encourage private sector participation and remove bureaucratic barriers.
- Support local solar tech innovation and manufacturing.
