Opinion: India’s Solar Promise: From Decarbonized Growth to Energy Security

At a staggering 15 million degrees and 110 times wider than Earth, the Sun’s vast atmosphere engulfs our planet, making it the most magnificent phenomenon in our universe. These sunny days harbor immense potential for India, a nation on the brink of a solar revolution. Even a fraction of solar energy could satisfy both current and future energy demands. The growth trajectory of solar power adoption in India serves as a crucial testbed for a vital global question: Can developing countries reduce their carbon footprints while achieving economic growth? Over the next two decades, India is expected to witness the highest energy demand globally, propelled not only by economic growth but also by a population increase estimated at 270 million. For a country aiming to be a $5 trillion economy, pursuing carbon-free growth is not just a goal but a necessity. Fortunately, most parts of India enjoy 300-330 sunny days annually, translating to over 5000 trillion kWh per year of potential solar energy, with an average solar incidence of 4-7 kWh/sq.meter/day. This positions India perfectly for a solar power revolution.

India’s pledge at COP 26 to achieve 500 GW of renewable energy by 2030 indicates a fourfold increase in operational assets, aligning with the expected rise in GDP. This ambition suggests that India will require a power generation capacity of approximately 900 GW by 2030. According to the Central Electricity Authority (CEA), the demand for renewable energy is anticipated to rise from 40% to 70%, although actual contributions to the grid from renewable sources are estimated to be 35% at best by 2030. Solar power is key to bridging this gap. With scalable, sustainable, and serviceable growth, solar photovoltaics aim to generate 50% of India’s energy needs if the 2030 target is met, surpassing the Paris Pledge for 40% energy from non-fossil fuels. Currently, India has installed about 66 MW of capacity across various applications, including one million industrial PV systems, making solar energy a significant contributor to the grid-connected power generation capacity.

The National Institute of Solar Energy estimates India’s solar potential at about 748 GWp, assuming 3% of wasteland area is covered by Solar PV modules, emphasizing solar energy’s central role in India’s National Action Plan on Climate Change. To enhance its green energy market and contribute to global supply chains, the Indian government plans to increase domestic solar equipment manufacturing capacity to 25 GWp each for solar cells and modules, and 10 GWp for wafers by April 2023. Despite China’s dominance in the polysilicon sector, India faces the challenge of increasing the cost of solar projects due to the reliance on imports for solar cells, modules, and inverters, which comprise nearly 60% of a project’s total cost. This reliance impacts the internal rate of return (IRR) from projects, many of which have already signed power purchase agreements (PPAs).

India’s solar industry heavily depends on imported solar cells and modules, as domestic manufacturing capacity is insufficient to meet the target. The country’s cell-making capacity is just over 3 GWp a year, while module production is approximately five times greater. However, the demand for domestically made solar cells remains low due to module suppliers preferring higher grade imported cells. To achieve the 2030 solar targets, India needs to install more than 250 GW of solar energy capacity in less than ten years, necessitating a rapid scale-up in solar panel production. The fragmented EPC market and the challenges of establishing module manufacturing facilities, dominated by imports and global overcapacity, underscore the need for local regulations to stimulate domestic production.

India’s solar potential is undeniable, with the support environment rapidly improving, forecasting a $6 billion to $7 billion capital-equipment market and nearly $4 billion in annual revenues for grid-connected solar generators. The future of India’s solar energy leadership lies in creating policy conditions for widespread solar technology adoption and focusing on emerging technologies such as monocrystalline, bifacial and half-cut cells, microinverters, and tracking equipment for efficiency gains.

By Mr Udit Garg, Director, Kundan Green Energy