Great growth predicted for India’s solar sector

Chief among those predictions is that India’s growing capacity will soon see it enter the international top five. The reason for this, according to the report, is that, "With rejection of the proposal to bring dumping duties in India, the sector has gathered steam and the country could well register a capacity addition growth of 250% in 2015."

The country has high ambitions around solar. The India Solar Handbook 2015 reports that installed capacity for 2014 stood at 3 GW, yet the country plans to increase this by 2022 to 100 GW through a shifting of the Renewable Purchase Obligation target from 3% to 10.5% of all power consumption in the country. That change is reportedly yet to be ratified under the Electricity Act 2003, which itself had planned for installed capacity to increase to 100 GW in 2022 from 20 GW in 2020.

The report gives no indication as to how it arrived at the 250% capacity addition growth for 2015. It also skirts away from answering the more fundamentally important question of what proportion of India’s energy consumption is – and will be – made up of solar or, indeed, renewables.

Figures from the World Bank show that between 2003 and 2011, electric power consumption within India (measured by kwh per capita) rose from a little over 450 each year to just under 700. And between 2005 and 2011, the percentage of energy coming from renewables, including solar, also according to the World Bank, rose from 2.6% to 2.8%, then fell before rising again to 3%. The relationship between these two figures is left unacknowledged and unaddressed by the report.

Positive outlook

Elsewhere, the report states, "(…) the outlook for the solar sector in India is extremely positive, driven by powerful, underlying fundamentals such as the rising cost of conventional power, environmental concerns, falling costs of solar power, high solar irradiation, a high power deficit, and the ability of solar to quick bring power generation capacity online. These fundamentals coupled with several state and central government initiatives should result in India becoming one of the largest solar markets in the world."

However, the findings should be taken with a pinch of salt. While huge industries may be slow to move, a sudden shift in the political landscape around renewables could be catastrophic. And central support, the authors admit, around the growth of rooftop solar has lacked.

There, the report states, "The government has belatedly shown its commitment to this market by announcing encouraging financing initiatives (priority sector lending, interest rate subvention) improving availability and cost of debt financing to go along with wide ranging net-metering policies. But we believe that these measures may not be anywhere near sufficient to achieve the 40 GW rooftop solar target."