Solar industry in India is growing at an incredible rate. From current solar capacity (13 GW) to aggressive pipeline (14 GW under construction and 6 GW to be auctioned), and Government policies to make green energy a mainstream energy source is impressive, inspiring even. The industry growth is supposed to realize the vision of ‘energy reliance’, which is one of the few reasons behind India’s solar revolution. However, lack of quality inspection mechanisms (till now) and influx of imported modules have introduced the question of long term performance of the solar projects.
Hon’ble Prime Minister of India, Shri Narendra Modi’s setting the solar energy target to 100 GW by 2022 has given Indian solar industry the leg up it needed, leading to current 13 GW capacity. India has, practically, doubled its solar capacity from 5 GW in 2015 to 10 GW in 2016. And, the country is estimated to add approximately 8 GW at the end of 2017. The growth trajectory is incredible indeed, and India is on its way to become the third largest solar market!
India has made a quantum leap reaching approximately 9 GW in 2016 from a meagre 10 MW in 2010. Government departments and private players working in unison has helped in scaling such an achievement. However, intense competition has led to tariff wars, resulting in very low tariff rates. This trend dates back to December 2011 when a foreign company bid Rs. 7.49 for projects under NSM. 6 years later we are standing at Rs. 3.64 bid for 750 MW (250 MWx3) solar project in Rewa, Madhya Pradesh. Although, low solar energy tariff firms up the hope of reaching countrywide solar grid parity with conventional energy, bidders are finding it tough to get funding. Banks and private lenders are inching away from financing solar projects in India due to lower tariffs, seeing it as a cost risk. To explain the situation in a single sentence, we can say that low tariff rates in the solar industry are introducing high cost financing issues to the developers and industry players.
The Indian Government has made incredible strides to lead the country into green energy transition. From 2010, when India had a meagre 10 MW solar capacity, the leap to 9 GW, has been commended at the global podium. And with favourable growth in solar installations, India’s module manufacturing capacity has grown approximately 150 per cent in just the last two years (from 2014).
2016 has been a progressive year for Indian solar industry. The leap from 5 GW in 2015 to around 9 GW grid-connected solar capacity was an incredible growth indeed. Rooftop segment has also flourished with the support of Government and rising awareness in the country, surpassing the 1 GW mark, achieving 113 percent growth rate in the last 12 months. The idea of solar park installations has also seen improvement with the Government approving 34 solar parks in 21 states. Although these indicators are pointing towards progress, it is important that we try to evaluate if the current growth rate can translate into success by reaching the 100 GW mark by 2022.