A partner from an Indian solar lamp company says the country’s rural communities could offer a 3 GW market over the next five years, despite an Indian government incentive program which has deterred solar players and driven up system prices.
Tarun Khurana, a partner at Loop Solar, says an incentive program that typically subsidizes up to 30% of the cost of solar lamps and off-grid lighting systems as well as offering top-up financing, is actually a deterrant to solar equipment suppliers.
"If you talk to some of the big players in this market, such as Tata Solar, they will tell you things operated better before the incentive program was introduced," Mr Khurana told pv magazine.
"The system is overly bureaucratic and suppliers can face a six-month wait to receive subsidy payments," he added. "It is the equipment suppliers that claim the subsidy so a lot of companies just raised the price of the systems when the incentive scheme came in which pushed up the price of systems.
"The government has tried to fine-tune the incentive mechanism repeatedly but it is still tied up in red tape."
Khurana says Loop Solar, based in Gurgaon, in India’s National Capital region, can muscle in on a rural off-grid market it estimates will rise to 3 GW by 2019.
"It is potentially a very big market which is currently being served by a lot of small companies in many areas," he added. "The problem with that is a lack of access to financing in a lot of areas and some of the smaller operators are supplying sub-standard equipment and little or no after-sales service."
Khurana said Loop Solar manufactures its lighting systems in China to its own designs with some assembly in India.