Solar Power is a source of clean energy and reduces the dependency on fossil fuels. India has set a target of 175 GW of renewables power projects by 2022 which includes 100 GW of Solar Power Projects. The Government is targeting 40% of power from non-fossil fuels by 2030, which translates to 250 GW of Solar Projects.
India has commissioned Solar Power Projects cumulatively amounting to 1 GW in 2012, 10 GW in 2017 and 30 GW in 2019. Thanks to the effort and support from the Government, this reflects the exponential growth of the Solar sector. The first 10 GW milestone took five years after hitting the 1 GW milestone and the next 20 GW happened in just two years. Indian Government is planning to issue another 60 GW of solar project tenders by 2020, to meet 100 GW of Solar Power target by 2022 .
This isn’t all. India has the potential of approx. 750 GW of Solar Projects as per Government data published in 2016-17. India has 470,000 sq.km. of wasteland and only 0.4 % of India’s wasteland is sufficient to meet the 2022 Solar Power target. India has both good solar irradiation and wasteland to meet such targets.
Further, India has already achieved grid parity in terms of tariff for utility scale Solar Power Projects in 2016. It is pertinent to note that Solar Power Projects tariff’s are now lower than Coal and Gas power projects in India. This is a very positive sign as Solar Projects in India can be executed without any Government subsidies.
However, it is important to note that there are still challenges to meet the target Solar project capacity, like:
1. Timely availability of suitable Grid Infrastructure;
2. Land ROW (right of way) issues
From the above, it is clear that India has the potential and resources to meet the growth momentum in Solar sector and needs to manage the challenges, which is possible through proper planning and Government support. To support the anticipated GDP growth, and to meet the impending Global Environment standards, India will need to accelerate the pace of growth in Solar Energy Generation.”
The Indian solar sector is at an inflection point and is about to become a success story. The installed capacity has reached an impressive 31.5GW (by end June 2019) but we still have a highly ambitious target of 100GW by 2022 to chase.
Although considerable efforts have been made to promote the sector such as a streamlined regulatory and policy framework, developing a conducive ecosystem for all stakeholders, obligatory large power consumers and strengthening grid infrastructure for seamless RE accommodation.
At the same time, there have been severe head winds in terms of uncertainty around duties (safeguard duty, anti-dumping duty), GST impact on solar EPC, caps on bid tariffs & the recent cancellation of PPAs by Andhra Pradesh tend to pull the sector backward. The key to achieving India’s true solar potential and maintain the growth path is to create the right environment for private participation. While some of the ingredients for India’s path to achieving its potential are in place (e.g. the industry is gravitating towards institutional players with appetite for large investments, solar now has a track record of successful operations of almost 6/7 years), other aspects such as the policy environment need to be tweaked so that India can continue on its path to 100 GW and beyond of solar usage.
The long-term quality of the assets is of paramount importance and to ensure that, both corporate and government power purchasers should not be just driven by the lowest tariffs that will compromise long term quality of the assets. If we step back, the amount of solar energy that we as a nation can tap will be maximized if we create efficient and highquality solar assets supported by reliable transmission infrastructure. Rebidding by states, cancellation of Letters of Intent, putting tariff caps will eventually create poor quality assets and NPAs for banks. This leads to a national resource wastage as well as wastage of public money and not just investor returns and financial stress for developers.
Hence, the need of the hour is to make policies to promote solar rooftop on a large scale, augment the transmission infrastructure to accommodate for the new RE capacity coming online and better coordination between state and central governments with a sustained focus on rapid capacity deployment to help India move closer to its goal of 100GW by 2022.