Questions have been raised over the Government’s sluggish progress in advancing Sri Lanka’s Renewable Energy (RE) sector, as investors voice deep concerns that the country’s once ambitious target of generating 70% of its electricity from clean energy sources by 2030 is increasingly out of reach.
Since assuming power, the Government has reportedly failed to initiate any new RE projects or approve any pending ones over the past six months.
Industry stakeholders warn that if this trend continues, Sri Lanka might take another century to meet its renewable energy goals. Urging policymakers to carefully examine international best practices and global energy transitions, investors stress that Sri Lanka currently lags significantly behind global benchmarks in renewable energy deployment.
Governance obstacles
National Chamber of Commerce of Sri Lanka (NCCSL) Deputy President and NCCSL Power and Energy Council Chairman Lakmal Fernando was vocal about governance issues hampering the sector.
“Appointing the Secretary of the Ministry of Energy as the Chairman of the Ceylon Electricity Board (CEB) is a textbook example of a conflict of interest,” Fernando said.
“The official tasked with regulatory oversight is now heading the very institution the Government is supposed to regulate. This situation raises serious questions about transparency, accountability, and good governance in one of the country’s most critical public utilities.”
Fernando also criticised recent legislative changes impacting the energy sector, saying: “The proposed amendments in the new Electricity Act, which plan to transfer the authority for setting consumer electricity tariffs from the Public Utilities Commission of Sri Lanka (PUCSL) to the Ministry of Finance, effectively eliminate independent regulatory oversight. This risks politicising tariff decisions and places consumers at a clear disadvantage.”
He further warned that policy instability was rapidly eroding investor confidence in renewable energy, noting: “We have already witnessed unauthorised curtailments of renewable plants during the New Year holidays, actions that constitute clear breaches of Power Purchase Agreements (PPAs). Despite formal claims for damages submitted by investors, no responses have been received to date. This sets a dangerous precedent that undermines trust in the sector.”
He also highlighted the gap between public commitments and practical action. “The Government publicly proclaims a 100% renewable energy target, yet it fails to establish a realistic, accountable timeline to achieve this goal,” he said.
“Targets without clear timelines amount to empty rhetoric. Without firm direction, Sri Lanka risks falling short of its decarbonisation commitments, becoming isolated from international climate efforts, and losing access to critical climate financing.”
Delays in project approvals and irregular procurement processes have added to investor frustrations.
He stressed the need for urgent reforms to restore investor confidence and sector stability, saying: “Sri Lanka’s energy future cannot be decided behind closed doors or through personal networks. A transparent, rules-based energy market is essential if the country is to attract credible international investments and secure a sustainable energy future.”
Delays to urgent reforms
Against this backdrop, the Ministry of Energy has submitted a detailed proposal for a new tariff structure aimed at substantially lowering rates paid by the CEB for electricity generated through new private sector projects, including rooftop solar, mini-hydro, wind, ground-mounted solar, biomass, and municipal solid waste projects.
For the first time, the proposal includes specific tariffs for rooftop solar systems integrated with Battery Energy Storage Systems (BESS), reflecting evolving technological trends.
Reliable sources indicate that the revised rooftop solar rates would range from Rs. 19.61 per unit for systems up to 20 kW, down to Rs. 14.46 per unit for systems of 1 MW and above.
These rates were developed by a 12-member committee comprising officials from the Ministry of Energy and Ministry of Finance, Planning, and Economic Development, as well as representatives from the CEB, Lanka Electricity Company Ltd., the Sri Lanka Sustainable Energy Authority, and the Central Bank.
However, the proposal is yet to receive Cabinet approval. At last week’s Cabinet meeting, the matter was scheduled for discussion but was deferred again.
Energy Ministry Secretary Prof. Udayanga Hemapala confirmed that while the Finance Ministry had submitted its observations to a Cabinet-appointed committee, the Energy Ministry was yet to receive these observations.
When contacted by The Sunday Morning on Thursday (5), Prof. Hemapala, who was abroad at the time, said: “The Cabinet decisions from last week have not been officially communicated to our ministry yet. We typically receive the minutes about a week after the meeting. We expect to get last week’s minutes around Monday (9).”
It is reliably learnt that Cabinet approval for the tariff proposal remains pending, delaying urgently needed reforms.
Grappling with setbacks
Sri Lanka has set ambitious renewable energy goals in line with its sustainable development and climate action commitments. The country aims to generate 70% of its electricity from renewable sources by 2030, with a longer-term goal of 100% by 2050.
To achieve these targets, significant investments are being made across the island in solar, wind, hydro, and biomass projects. Programmes such as ‘Soorya Bala Sangramaya’ (Battle for Solar Energy) actively encourage rooftop solar installations, while large-scale wind farms are being developed in coastal regions.
These initiatives aim not only to reduce dependence on imported fossil fuels but also to enhance energy security, protect the environment, and drive economic growth through green jobs and sustainable industries.
Despite these ambitions, the rooftop solar sector is currently grappling with major setbacks caused by grid instability, Government-imposed tariff reductions, and policy uncertainty. The rapid expansion of solar installations has occasionally overwhelmed the national grid, prompting calls for solar owners to shut down systems during peak solar production hours.
Cuts to feed-in tariffs threaten the financial viability of many solar businesses and individual users, putting jobs and future investments at risk. Without urgent improvements – including enhanced energy storage capacity, tariff stability, and clear policy frameworks – Sri Lanka’s rooftop solar growth, along with its broader renewable energy aspirations, could be severely compromised.
In response to criticisms of slow progress, Prof. Hemapala rejected claims that the Government was dragging its feet on renewable energy development.
“We have initiated a number of fresh initiatives to promote renewable energy in the country,” he said. “We will not deviate from our policy to achieve 70% renewable energy by 2030. In fact, we are working to improve and accelerate these efforts.”