Fitch Solutions Macro Research on Tuesday said it is maintaining a positive outlook on India’s renewables growth, excluding hydro power, irrespective of general elections as both the incumbent and the opposition support clean energy.
“We maintain a positive outlook on India’s non-hydro renewables growth regardless of India’s Lok Sabha election outcome, as both the incumbent government and main opposition remain strongly supportive of renewables growth,” Fitch Solution Macro Research said in its outlook for India’s renewable energy sector.
The Fitch Group unit expects the country’s non-hydro renewables capacity to grow at a robust annual average growth rate of 11.1 per cent from 71.7 gigawatt (GW) in 2018 to over 204 GW by 2028, with solar being the main driver of this expansion.
According to the latest report from Fitch Solutions Macro Research, a unit of Fitch Group, Indian solar power capacity will grow robustly at an annual average rate of 15.3% to reach 105.9 GW
by 2028, up from 26 GW in 2018. This assessment is based on the continued strong government support for the solar sector, including aggressive growth targets, a large number of capacity tenders and the increasing effortstoestablishaconducive investment ecosystem for the Solar Sector. The recent efforts toward encouraging rooftop solar installations and installation of solar pumps and grid-connected PV projects enabled by the KUSUM scheme will ensure that distributed small-scale facilities become a supportive factor to solar growth. Besides the government impetus is further evidenced in a slew of supporting measures such as 12 GW of new grid-connected capacity for government use; waiving inter-state transmission charges, drawing up a new National Electricity Plan to develop transmission systems and incorporate 175 GW of renewables into the grid by 2022.
Despite the strong renewables growth, it highlighted that coal will remain dominant in the country’s power generation mix over the next decade.
Strong renewables sector growth has been seen as a key marker of Modi’s power sector reform success, and it believes the Modi government will continue to encourage investment into the sector through supportive policies to reach the ambitious target of 175 GW renewables capacity by 2022.
It said, “We do not believe that the new government will back out of the existing renewables sector policies, as they have also promised to promote ‘green energy’ and aim to encourage investments in off-grid renewable power generation in their election manifesto.”
The report also added that although the recent safeguard tariffs on solar cells from China and Malaysia will weigh on investor confidence in the short term, this will not have a significant impact on our longer term outlook, and investor interests will rebound and continue to strengthen the project pipeline.
Credits: Fitch Solutions Macro Research