In India, energy is still mainly sourced from coal and gas based power generation, which make up 70% of total installed power capacity in India. Electricity production in India grew at a CAGR of 6.3% from 2010 to 2015 and is set to further increase due to rising demand. Currently, energy shortage in India is about 24,000 million units (excluding the approximate 20,000 million units required by regions that still do not have electricity access). Therefore, India is actively moving towards the alternative – Renewable Energy sources. Especially an increased application of Solar Energy has been observed in India in the past couple of years. What is the current scenario and progress in India’s Solar Power Industry?
India ranks third, after US and China among 40 countries with a focus on Renewable Energy and the Government is focused to make the air in India cleaner and reduce carbon emission with Renewable Energy generation and utilization from sources such as Wind, Hydro and Solar. Based on the increasing number of solar installations, it is forecasted that India will add a Solar Power capacity of 4.8 GW in 2016. A cumulative installation of 8.6 GW in Solar Power capacity has already been reached. The Government, with its strong inclination towards Renewable Energy, has an ambitious target to achieve an installed capacity of 175 GW from Renewable Energy by 2022. This is divided into 100 GW from solar, 60 GW from wind, 10 GW from biomass and 5 GW from small hydro. The Solar Project, under the Government’s National Solar Mission, with an aim to reduce the cost of Solar Power generation in the country, currently has a pipeline to install 21 GW of grid connected Solar Power of which 14 GW is under development and 7 GW is scheduled to be auctioned.
The Indian Government considers rooftop Solar Power as one of its top clean energy priorities as it mostly doesn’t require any land acquisition cost and has low transmission cost – and it subsequently reduces electricity bills while being a reliable alternative to the unreliable electricity supply from the grid. Of the 100 GW Solar Power capacity target to be achieved by 2022, 40 GW is from rooftop Solar Power – this target has been divided between various Indian states. In this regard, many Indian states like Delhi, Gujarat, Haryana, Karnataka, Madhya Pradesh among others have formulated state level Solar Energy policies & schemes to promote use of rooftop Solar Power for homes as well as businesses. These state policies and schemes allow for subsidies to consumers who want to install rooftop Solar Power systems and any surplus electricity generated by those rooftop systems will be adjusted against the owner’s consumption. Such installations can benefit regions that don’t have sufficient energy access, like rural areas, but have lots of sunshine to harness.
Models such as third-party financing implemented in countries like USA, China, Japan (where the solar panels are installed on the consumers property by a third party financer and the consumer then can purchase the generated electricity at specified rates) can boost the penetration of rooftop Solar Power in India. Such models will encourage consumers to install Solar Power systems without the cost burden or risk of performance of the system. This model is beneficial for investors as well, as all Indian States provide internal rates of return (IRR) of at least 14%.
Currently, 90% of solar panels in India are imported as India is still lacking in advanced manufacturing technology in the sector. The Government is now actively inviting foreign investors to take part in the ‘100 GW Solar Mission’, with the aim to increase domestic production of solar panels, at the same time reduce cost of manufacture and bring in international state-of-the-art technology.
Another area of concern is the wastage of generated Renewable Energy. Due to the lack of sufficient storage technology for electricity, 15-20% of the Renewable Energy India is currently wasted by simply discarding the unused power generated without even entering the grid. Apart from the focus on producing Renewable Energy, efforts also need to be put into storage technologies that can take in the generated power and release it as a steady stream – as the proportion of energy generated by renewable resources is variable (depending on the speed and direction of wind and solar intensity). States like Tamil Nadu that produce surplus Renewable Energy are also requesting the Government to speed inter-state Green Energy corridors construction so that the generated energy doesn’t go waste.
An Adani Group project that will bring India closer to its vision of becoming a leading producer of Green Energy is the set up of the world’s largest Solar Power plant. This 648 MW unit is set-up in Tamil Nadu, India by installing 2.5 million solar modules. Coal India (CIL), a state-run mining major also signed an agreement with the Solar Energy Corporation of India (SECI) to set-up 1000 MW capacity Solar Power plants across India. In the first phase, CIL will install two Solar Power plants of 100 MW capacity in Madhya Pradesh. In the second phase it plans to set up four solar plants in Madhya Pradesh, Maharashtra, Chhattisgarh and West Bengal with a total capacity of 600 MW.
Overall, the future of the Solar Power industry in India is a promising one, with the Government’s focus on implementation of Renewable Energies being a major support to the industry’s growth. Being the world’s fourth largest emitter of greenhouse gases, India recently ratified the Paris Climate Deal aimed at reducing the global greenhouse gas emission. This led to Asian Development Bank’s support towards India to help advance Solar Energy technology by funding $500 million. Many global private players are actively investing in the Solar Power industry of the country. Trina Solar planning to set-up a manufacturing facility in India for solar modules, while other companies like Bosch – plan to double its installed Solar Energy capacity in India by the end of 2016, ABB Group – plan to install a rooftop solar microgrid at its largest manufacturing facility in India to ensure steady electricity supply. This is the right time for foreign companies in the Renewable Energy sector to enter and expand in India as the focus on adopting Green Energy technologies is at its peak. With the engagement of both Industry and Government, Solar Power is expected to soon become a major part of India’s Power network.
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