India will add 5.1 GW of solar PV this year, finds Bridge to India


New analysis by Bridge to India (BTI) projects India to edge out Japan to become the third-largest solar market in the world next year, building upon strong 2016 that saw the sector grow 137% in a year.

The latest report by BTI puts the nation’s cumulative solar capacity above 10 GW, taking into account all forms of installed solar – including rooftop and off-grid. This year will end with 5.1 GW of new capacity added, with an annual average capacity of between 8-10 GW from 2017 onwards.

Driving this surge is the government’s ambitious National Solar Mission, which has targeted the installation of 100 GW of capacity by 2022, as well as tumbling solar prices, which recently dipped below $0.06/kWh in the latest large-scale tender.

Vinay Rustagi, BTI’s MD, commented that the most obvious question on the lips of Indian solar observers will now be: can the country hit its 100 GW in the next five years?

"It is a very steep target in our view," Rustagi said. "But rather than quibble about the target, the important point is to acknowledge the transformational economic, environmental and social potential of solar technology and to create a conducive environment for its growth.

"After the Modi government came to power I 2014, it announced a major policy shift in India’s energy sector by multiplying the 2022 solar target five-fold o 100,000 MW. Since then, it has launched multiple policy initiatives including UDAY and solar parks policy to support the sector."

UDAY, the Ujwal Discom Assurance Yojana, is a scheme that is charged with shoring up Inia’s weak distribution sector. At least eight of the 17 Indian state/union territories that have joined the UDAY scheme – including weak performers such as Haryana and Uttar Pradesh – have been successful in reducing the deficit per unit of electricity.

Another concern among private sector developers looking to operate in India’s solar market is the financial strength of the offtakers, and as this improves, confidence and deployment will increase.

Government-backed Solar Parks have also garnered strong attention, prompting the MNRE to up the capacity from 20 GW to 40 GW, while foreign investment in the development of eight green energy corridors – chiefly from Germany’s KfW bank – will help expedite the transmission of solar power from rich states to poorer states.

The BTI report showed that 85% of India’s installed solar capacity is utility scale, with rooftop solar at around 10% but growing at a CAGR of 98%. The analysts anticipate a strong impetus for rooftop solar over the coming few years, particularly deployment on government-owned buildings where there is potential for around 1.5 GW of capacity on central ministries and departments alone.

Off-grid solar, on the other hand, is expected to perform below potential, building slowly on the 360 MW of current capacity due to a lack of strong government support. However, recent analysis by Bloomberg New Energy Finance (BNEF) forecast growth for the off-grid sector in 2017.

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