Investment, Growth, and Sustainability: SunSource Energy’s Role in Indian Solar – Kushagra Nandan, Co-Founder, Managing Director and CEO, SunSource Energy


How do you perceive the current state of the Solar energy sector in India? What trends and developments have you observed recently?


The Solar energy sector has demonstrated remarkable growth and advancement in India. The cumulative Solar capacity in India has impressively surged to reach 71 GW. An evident trend is the steady rise of Solar’s presence in the overall power mix. Notably, Solar power now contributes ~16% to the total installed power capacity and an even more significant ~38.3% to the total installed renewable capacity in the second quarter of 2023. These figures showcase a substantial rise compared to the preceding year’s numbers of 14% and 35.4%, respectively.


Growing demand from the Commercial and Industrial (C&I) segment for clean energy transition has driven increased Solar energy consumption, contributing to greater generation capacity. This surge acts as a growth driver for the Solar energy sector in the country. In addition to contributing to the net-zero goals, the industry has recognized significant cost savings. Due to this, industries including data centers, FMCG, Steel, Cement, Pharma and Automobile are accelerating their transition to Open Access Solar.


The government’s proactive approach has contributed to the sector’s growth. For example, earlier this year the Ministry of New and Renewable Energy (MNRE) announced plans to release bids for renewable projects totaling 50 GW annually for the next 5 years, which will further propel the Solar energy sector’s advancement. Along with this, the government is continuously working on making the sector more conducive to investment with its long-term vision and timely policy interventions.

What are some of the key factors driving the growth of the Solar industry in India, and how is SunSource Energy positioned to capitalize on these opportunities?

One of the driving forces behind the rapid growth of this sector is the proactive approach of the government. To achieve a monumental 500 GW of nonfossil fuel-based capacity by 2030, of which 280 GW is slated to come from Solar energy, India has devised comprehensive plans to integrate various renewable sources like Solar, wind, hydro, and nuclear power. As aforementioned the demand from the Commercial and Industrial (C&I) segment and favorable regulations for the Solar Open Access Solutions by key states have also led to the growth of the Solar industry in India.

At present, SunSource Energy has established its presence across more than 20 states throughout the country. Anticipating a sustained and robust demand from the C&I segment, SunSource Energy is strategically positioned to expand its portfolio and enhance the supply of Solar power to this segment. Our primary focus is on delivering comprehensive Solar solutions to commercial and industrial clients, encompassing the entire value chain – to simplify their energy transition and help them with their net-zero goals.

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Being a part of the SHV group, a 125-year-old Dutch Multinational, empowers us to move ahead rapidly in the country’s renewable sector. This enables us to navigate the growth trajectory more effectively and facilitate seamless energy transitions for an increasing number of clients. SunSource Energy is committed to furthering the adoption of Solar energy in the C&I sector, driving sustainable growth and contributing to the nation’s renewable energy objectives.

India has set ambitious renewable energy targets. How do you see the Solar sector contributing to the nation’s energy transition, and what challenges might arise in achieving these targets?

India is not only on track to achieve its ambitious target of 500 gigawatts of renewable energy capacity by 2030 but is also poised to surpass it. With this ambitious objective, the renewable sector is set for rapid growth, with Solar energy playing a pivotal role in this capacity addition. It will be interesting to see where we end up. I’m confident that we will be proud of our achievements when we reach 2030.

Solar energy holds a pivotal role in India’s National Action Plan on Climate Change through the National Solar Mission (NSM). It aligns with the government’s focus on sustainable growth and has become a crucial component in addressing the country’s energy requirements and ensuring energy security. Till recently, the government’s focus naturally was on utility-scale projects due to the benefits of scale, which has led to the growth of the industry, but in the recent past, open access has also been in focus. This is visible through several initiatives including the green electricity rules.

The Solar energy sector faces inherent challenges. Initial investment and extended payback periods are required for large-scale Solar projects. Grid integration remains a work in progress due to Solar’s intermittent nature and load-balancing issues. Even with domestic manufacturing slowly picking up pace, local module shortages persist as the supply chain relies on Chinese imports for components like cells and wafers. However, the government’s second phase of the production-linked incentive scheme for Solar modules aims to bolster the entire value chain.

Uneven policies across states have always been a reality that open-access players must navigate. The regulatory framework for open access varies from one state to another, based on the different policies, which are implemented in different ways. Despite challenges, the Solar sector is poised for robust growth, contributing to India’s renewable energy goals.

What are the typical advantages for the C&I segment to adopt Open Access Solar Power?

The Commercial and Industrial segment contributes to more than 50% of India’s overall electricity consumption. Embracing Open Access Solar holds significant advantages for this segment. Firstly, substantial financial savings can be achieved through the adoption of Solar power. The C&I segment in India pays a much higher tariff compared to residential and agricultural electricity consumers. In some states, C&I consumers can save up to 50% on their electricity costs. Secondly, corporations can align with their Net Zero targets by fulfilling a significant part of their power requirements through Open Access Solar. Corporations globally have committed to timebound net-zero targets. While rooftop Solar has a sizing limitation, Open Access Solar provides them a solution to transition them as well as their suppliers to clean energy and contribute to their scope 2 and scope 3 emission reduction.

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Government policies and incentives play a significant role in shaping the renewable energy landscape. Please share your remarks.

The government’s policy reforms and incentives have created a favorable environment that is bolstering the sector. We are actively collaborating with the government to achieve national objectives by facilitating the corporate sector’s energy transitions and aligning with overall net zero ambitions.

The government has been providing support to the sector for some time now. In the 2021- 22 Union Budget, the Government introduced the PLI scheme targeting 10 GW of integrated manufacturing capacity for ‘High-Efficiency Solar PV Modules’. From an overall renewable energy perspective, the Budget for 2023-24 emphasized green growth to bolster India’s journey towards NetZero targets. In the budget, there was an allocation of Rs 19,700 crore for the National Green Hydrogen Mission, aimed at propelling the economy into a low-carbon intensity and green framework. Additionally, Rs 35,000 crore was earmarked for priority investments in energy transition and net-zero objectives.

The 2022 Electricity (Promoting Renewable Energy through Green Open Access) Rules, as notified by the Government, marked a positive stride for the sector and bolstered green power demand in the C&I segment. With the C&I segment contributing around 50% of India’s electricity consumption, the desire for green energy in this sector, particularly from Open Access projects, has surged in recent years. By reducing the Open Access threshold from 1 MW to 100 KW, the Government has unlocked the potential for substantial growth in this market in the upcoming years. States are also actively supporting the implementation of open access regulations, thereby facilitating energy transition across various industries.

Access to financing is crucial for large-scale Solar projects, please share your perspective. Could you also discuss SunSource Energy’s strategies for securing investment and managing financial risks in the Indian Solar market?

Capital is a primary raw material for a Solar project. Developing a large-scale Solar plant entails a significant initial investment and incorporating diverse long-term financial models that involve minimal developer contributions is crucial. To ensure sustained sector growth along with facilitating capital accessibility, project risk mitigation is also imperative. Fostering industry expansion requires the development of innovative financial solutions that provide substantial funding at reduced interest rates and for extended periods, particularly for large-scale Solar endeavors.

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While developers continue to encounter difficulties securing capital for customers with a weak credit profile, the Solar sector as a whole has witnessed active participation from the investor community in India and abroad in the backdrop of policy support by the Government. Multilateral organizations like the World Bank and the Asian Development Bank have been providing financing facilities to support the sector.

At SunSource Energy, we have established strategic partnerships with prominent and reputable lenders, which allows us to effectively develop our large-scale Solar projects. Additionally, being part of the SHV group provides us with a unique advantage – of having a long-term perspective for developing projects as well as striking partnerships with clients. It enables us to plan and execute our projects with a focus on sustainability, longevity, and optimal performance. And confidently navigate the complex landscape of large-scale Solar projects and contribute significantly to India’s renewable energy goals.

Supply chain disruptions and environmental concerns have gained prominence in recent years. Please comment from your company’s perspective and an industry standpoint.

The global supply chains have faced significant disruptions due to the dual challenges of the COVID-19 pandemic and the Ukraine crisis. These disruptions have inevitably affected various sectors, including the Solar industry. However, at SunSource Energy, we were fortunate to have navigated this period without any impacts. Our ability to maintain operational stability during these challenges can be attributed to our established long-term relationships with our partners. These strong partnerships ensured the timely delivery of essential components and materials required for our Solar projects.

The Solar industry’s supply chain has been encountering several challenges beyond those posed by COVID-19 and the Ukraine conflict. But the solution needs to be a long-term one to protect India’s energy security as well as foster robust and consistent growth. The Government’s view on the same has also been long-term, building domestic capabilities to support the fast-paced growth of the sector. This regulatory shift is anticipated to impart substantial momentum to the sector in the short term. While initiatives like ALMM might impede in the short term for Solar companies from a long-term perspective it would be beneficial for India’s Solar Industry ecosystem.

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