Solar energy growth has quadrupled in recent years with the help of Government backed policies and financial aids. Standing at a cumulative 10 GW energy capacity in March 2017. Keeping the impressive growth rate in mind, we can assume that India is very likely to reach 100 GW capacity by 2022.
Currently Indian solar sector has approximately 14 gigawatt of solar projects under development and more than 6 GW capacity projects are about to be auctioned. And capacity addition mandates under state policy shows- Andhra Pradesh to get 5 GW by March 2020, Haryana- 1.3 GW by 2022, Karnataka- 2 GW by 2021, Maharashtra- 7.5 GW by 2019, Tamil Nadu- 3 GW, and more.., which promises growth. Initiatives like- tax-free grants, additional one-time allowance, subsidies and rebates on capital expenditures have helped Indian solar structure to grow and brought in investments into the sector as well.
Policies like- net metering, viability gap funding, International Solar Alliance, mandating solar installation in Government buildings, raising tax free solar bonds, offering long tenure loans, ‘Solar Park’ development, etc. have also successfully created the environment for the Indian solar industry to grow and get prepared for the future. However, comparing Indian solar sector with global solar growth showcases challenges in the sector that we need to focus on.
Contrasting with Global Growth
The urgency of building solar capacity is dawning upon countries across the globe. Countries like China, Japan, US, and Canada have already made significant progress in utilizing solar capacities. And countries such as Philippines, South Africa, Morocco, Chile, and Kenya are now making investments in solar energy. China has installed approximately 34.2 gigawatts of new solar PV in 2016, and US (14.8 GW), Japan (8.6 GW) have claimed the second and third position in dominating the global solar industry, and leading the world PV installations to 75 GW in 2016 alone. On the other hand, India installed 5 GW within 2016, which positions the country at a fair distance from the solar energy leaders.
Countries like China, US, and Japan have built a stable infrastructure to support their solar industry. And it has helped them to create domestic demand and deliver solar modules at low cost, claiming a huge portion of the market. Global growth interprets that investment in solar industry will grow towards upholding solar energy as available replacement for traditional energy choices. India needs to put this growth scenario in perspective to move ahead and make positive changes in its own solar industry.
A Better Approach
Current Indian solar vision has divided into various segments to bring support in financing, industrial development, demand creation, and reaching competitiveness. In this crowd of choices and requirements, India is losing focus in domestic capacity enhancement, which is the only way to achieve solar self-reliance. If India is to go toe-to-toe with countries that currently dominate the global solar industry, a strong domestic solar capacity enhancement is required. The recent announcement of Energy Minister Shri Piyush Goyal that incentives package for domestic firms will not see the light of day, is therefore actually a severe blow to the Indian solar self-reliance dream.
India desperately needs to act on-
- Stabilizing flexible financing, incentives, and tax exemption benefits to domestic manufacturing industry
- Reducing net metering implementation time frame to boost the solar projects implementation
- Creating demand for domestic solar modules
- Extending the existing RPOs to consumers
- Implementing and monitoring use of feed-in-tariff processes
- Checking if the mandated industries/utilities are using or installing solar solutions or not
- Increasing awareness on solar technologies
- Bringing quality guidelines to ensure energy sustainability
- Developing an easy certification process to establish high growth rate
Further, focusing on solar skill development can bring India the opportunity to harness solar potential by increasing domestic capacity and awareness.
Government support, raising energy demand, global acceptance towards solar energy, and increasing investor interest, are opportunities for solar sector to grow beyond expectations. And, financial support in guise of multi-billion dollar commitments, which India desperately needs, is coming through mutual efforts of Government and private solar companies (click here for information on Indian solar investment scenario). But challenges are real and they need to be addressed.
The shift towards solar sector can help India scale great heights, claiming a large portion in the global energy sector, but to reach these opportunities, the country needs to boost its own efforts.