With total installed solar capacity in India rising from 22 MW in January 2011 to over one GW in October 2012, and a reported pipeline worth over 1.1 GW, investors are casting covetous eyes on the market.
However, thanks to the narrow geographical focus of the two initial drivers of photovoltaics in the country the Gujarat Solar Policy and the National Solar Mission some 87% of Indias total installed capacity is located in just two states: 68% (709 MW) in Gujarat; and 19% (195 MW) in Rajasthan.
An overdependence on these twin drivers has also meant that when either stalls, the photovoltaic industry as a whole lurches to a halt. As a result, an initial surge of 1.1 GW of capacity at the end of 2010 was driven by the two schemes; with the National Solar Mission delivering only 350 MW more in December 2011 and a further 310 MW in the first half of this year, there has been a significant lull in development, as the Rooftop Photovoltaic and Small Solar Power Generation Programme (RPSSGP) has failed to take up the slack.
A shift in policy to the use of market forces-driven renewable energy certificates (RECs) has failed to maintain the earlier boom thanks to the combination of a lack of long-term price predictability for the RECs and a lack of enforcement of renewable purchase obligations (RPOs) in some states.
However, Bridge to Indias report states that demand for RECs outstrips supply and the race to grid parity in several states will help further lift demand for solar.
The unbalanced nature of the solar market across the country is reflected by the reports league table of best and worst performing states. Predictably Gujarat and Rajasthan are rated top of the pile but Assam; Himachal Pradesh; Arunachal Pradesh; Nagaland; Meghalaya; Sikkim; Goa and the Union Territories are highlighted as having no state solar policy and no solar developments and a further five states are also lacking any targets or legislation.
The Solar Handbook pinpoints cause for optimism from the countrys booming telecommunications infrastructure. With around 33% of Indias telecoms towers in off-grid locations and 23% receiving less than 14 hours of electricity daily, there is a heavy dependence on diesel.
And, with the solar LCOE in India already markedly cheaper than diesel and a further 110,000 towers set to go up by 2016, photovoltaics are expected to make a significant contribution to the mobile communications revolution.
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