Solar Power Is India’s Green Future

In 2018, the solar power industry saw a 24% increase in its y-o-y capacity additions, while hydropower saw 2% and wind energy saw a 10% increase. Although a majority of the solar capacity additions were dominated by Asia, new markets like Brazil, Saudi Arabia, Egypt, Spain, and Latin America saw considerable growth.

India’s Solar Expansion and Challenges

The remarkable upsurge in private participation in the power sector in India and the government’s thrust on renewable energy is in sync with the country’s solar overdrive in pursuit of the 100-GW target for solar projects, but there are impeding issues like tender cancellations of mega projects. China’s policy shift, feed-in-tariff cut in Japan, and policies levying of taxes and duties on the solar energy industry in India limited solar sector growth in 2018, but the solar sector is expected to bounce back in 2019.

Government Push for Rooftop Solar

With the tender process picking up pace in FY 2019-20, we have a lot to look forward to this year. Pursuing a 40-GW target, the government is also all set to give a big push to the rooftop segment through favorable policies like net metering.

The Future of Solar Energy in India

Solar Power is India’s Green Future as it presents a great opportunity to phase out fossil fuel and its growing expenses while transforming the country with industrial, social, and economic growth. The future of solar energy in India largely depends on achieving the ambitious solar power generation target of 100 GW by 2022. With the cumulative solar capacity going up to 36.36 GW as of June 30, 2019, the market sentiment is upbeat because of the record number of installations.

Investment Needs for Solar Growth

We believe that by 2030, India’s solar industry is poised to grow phenomenally. The country will need $250bn in green energy funds from 2023 to 2030. Investment opportunity for over $30bn per year is expected to come up in the next decade, according to the Economic Survey.

India’s Renewable Energy Goals by 2030

Significantly, India is running the world’s largest renewable energy program. Solar power generation holds the key to the unprecedented growth India needs to register to get to the magic figure of 100 GW. Fuelling the ever-growing needs of practically all the other key sectors, the power sector forms the backbone of our rapidly expanding economy. Since sustainability is at the heart of all development efforts directed towards building a New India, the country is aiming at increasing the share of renewables in the total installed power capacity to 50% by 2030 with a major chunk coming from solar energy.

Cost Efficiency and Competitive Bidding in Solar Energy

It is pertinent to mention here that about 40 percent of the power capacity installed in India this year is solar. All-out efforts at transforming the energy mix are underway. In the Indian solar market, almost every passing tender has promised to deliver cheaper electricity. The solar industry is entering a period of cost efficiency, thanks to advances in technology and competitive bidding. Solar power tariffs in India have plunged to a record low of Rs 2.44 per unit, which will push demand in a big way.

Government Initiatives and Policy Support

The solar industry has witnessed rapid growth in the last few years and is expected to grow even more in the coming years. To encourage the shift from environmentally detrimental sources of energy to cleaner alternatives, the government has been playing an active role by introducing several incentives, such as GBIs, capital, and interest subsidies, which are likely to reduce the dependency on conventional energy and increase adoption of solar power.

Encouraging Domestic Solar Panel Manufacturing

To further encourage the adoption of solar power, a slew of welcome initiatives has been recently introduced by the government, which have been welcomed across the industry. This includes the imposition of BIS standards on solar imports, besides ensuring adherence to the quality of products instead of mere price benefits. Another welcome step in the concept notes released by the MNRE proposes the development of 10 GW of manufacturing capacity over a period of five years.

The Economic and Environmental Benefits of Solar Power

One of the biggest advantages of solar power is the ability to avoid the politics and price volatility that is increasingly characterizing fossil fuel markets. While the prices of fossil fuels have increased, the per watt price of solar energy production has more than halved in the past few years and is set to become even cheaper in the near future as better technology and economies of scale come into effect.

India’s Position in the Global Solar Market

Renewables account for a sizeable share of the power capacity additions, highlighting the significant investment flowing into the solar sector in particular. No wonder, India has emerged as the third-largest solar market globally. But we still have a long way to go to become a global solar superpower like China and the US.

Investment Challenges and the Need for Foreign Direct Investment

To achieve the target, India needs heavy investment in the coming years. A major part of it has to be raised within the country, as the renewable sector could so far only attract a foreign direct investment (FDI) worth $7.5 billion in the last 18 years (2000-2018), according to a report by the India Brand Equity Foundation.

Challenges in Domestic Solar Panel Manufacturing

The solar sector can accelerate its growth by focusing on manufacturing and supporting the domestic solar panel manufacturing industry with sizeable investments. This will help India scale greater heights like China, which penetrated foreign markets by undercutting their market prices.

Infrastructure and Transmission Capacity Issues

We need to pick up on the domestic manufacturing front. Various efforts by the Solar Energy Corporation of India (SECI) to attract bids for the development of the inter-state transmission system for solar power evacuation have gone in vain. Solar power generation has to be in sync with the growth in transmission capacities owing to evacuation challenges, otherwise, we may be in for a slowdown.

Rooftop Solar and the Need for Rapid Expansion

Though rooftop solar is the fastest-growing renewable energy segment in India, the installation capacities must rapidly increase if the nation is to meet its ambitious renewable energy target by 2022. Conducive policies, financial support, and consumer awareness should form our focus of attention.

The Path to Achieving the 100-GW Goal

The industry needs to be steered in the right direction to take us closer to the 100-GW goal. We need integrated energy planning, favorable policies, and investments across the value chain. Release of RTC tenders and incentives for OA charges are critical.

The Role of the International Solar Alliance

India should leverage its position in the 121-nation International Solar Alliance by assuming a leadership role to make way for greater growth through favorable policies and coordinated efforts. As a global solar superpower in the making, we ought to wrest this initiative. With a proactive approach driven by all these factors, India’s solar power will usher in a green and sustainable future.

Frequently Asked Questions:

1. Why is solar power important for India’s energy future?
Solar power helps reduce reliance on fossil fuels, cuts energy costs, and supports India’s goal of achieving 100 GW of solar capacity for a sustainable future.

2. What challenges does India face in expanding solar power?
Challenges include policy uncertainties, transmission infrastructure limitations, financial constraints, and a lack of domestic solar panel manufacturing capacity.

3. How is the Indian government supporting solar energy growth?
The government provides incentives such as subsidies, net metering policies, and favorable regulations to boost solar adoption across residential, commercial, and industrial sectors.

4. What role does rooftop solar play in India’s renewable energy expansion?
Rooftop solar is the fastest-growing renewable segment, especially in commercial and industrial sectors, but residential adoption needs more policy support and incentives.

5. How can India become a global leader in solar power?
India needs to enhance domestic solar manufacturing, attract investments, improve grid infrastructure, and leverage its leadership in the International Solar Alliance.