Indian solar power industry has been growing at an incredible rate and currently stands at nearly 32 GW of installed capacity in 2019. Although 2019 brought India new opportunities for the industry, we have to highlight that the country was only capable of installing less than 7 GW of solar energy capacity in the calendar year 2019, which is considerably lower than the country’s performance in 2018. The trade war between China and the US, effects of demonetization, GST, slowing down investment, a slew of tender cancellations and dampening global manufacturing pace have interrupted the solar power growth in the country.
Therefore, the country is now eagerly looking at 2020 to set and achieve new milestones in the path to achieving the country’s solar vision.
Solar Installation Trends
Close to 12 GW of new solar energy capacity addition is expected in 2020 in India. The utility-scale solar installation growth in India has been consistent in 2018 and 2019. Therefore, it is expected to lead the growth in 2020 as well. However, the Government of India’s recent focus (40% CFA, mobile app launch, net metering) on rooftop solar power sector (especially residential) is expected to increase consumer awareness and add more capacity year over year.
Leaving Fossil Fuel Behind
Indian solar industry is expected to surpass coal in CAPEX and eventually leave coal behind in capacity addition by the end of 2020. More than 5 GW of projects under execution and 15 GW of projects in the pipeline, solar panels industry is expected to lead Indian renewable energy growth to account for more than 20% of the country’s power generation capacity.
Additionally, with power generation peak showing the timeframe of 9 am to 6 pm all around the country, solar power is expected to become much viable option for consumers with peak generation capacity from noon to evening and is expected to reduce coal requirement by about 8% by the end of 2020, making $17 billion per annum saving from coal imports.
Policies like RPO targets and mandating local IPPs to derive a portion of their energy from renewable sources have already begun taking effect and in 2020, Indian solar energy industry is expected to benefit from more solar energy demand in the grid. Additionally, corporate tax cuts will also allow to bring in more foreign investment which the industry desperately needs.
Flow of Investment
Investors like SoftBank (Japanese multinational), Foxconn Technology (Taiwanese technology manufacturer), and Bharti Enterprises have announced a joint venture worth of nearly $20 billion to develop solar power industry in India. This will create the flow of funds needed for Indian solar industry to grow manufacturing scale, upgrade technologies, uphold quality standards, introduce more and more projects and create jobs; thus effectively leading the country towards a sustainable future.
Challenges in Sight
Although there is growth in sight and 2020 is expected to become a remarkable year for the solar energy industry in India, the country needs to consider investing in building better infrastructure (for power evacuation, power transmission etc).
DISCOMs would also have to be convinced by the Government to pay a more proactive role in spreading solar power awareness and adoption choices. Payment dues from DISCOMs is one of the major issues in path of solar power development. A better payment management is required for better payment collection. Additionally, new policies supporting manufacturing, solar export, land acquisition, and simplification of bureaucratic hurdles have to be introduced to support green energy growth in India.
It seems that 2020 is bringing forward a plethora of new opportunities for the Indian solar energy industry, and Government of India’s continuous move towards bringing in a sustainable and green future makes these predictions possible.