Ever since India launched its solar mission in 2010, under which the country is supposed to install 100 gigawatts of solar power by 2022, the sector has made remarkable progress. Despite remaining challenges, experts agree the sun will continue to play an increasing role in powering the country

The last few years have been a game changer for India as far as solar energy is concerned. Since 2014, the size of sanctioned solar photovoltaic in the country has grown over threefold thanks to supportive policies and the tendering of larger renewable energy lots, says the International Energy Agency (IEA). In addition to a general increase in rooftop solar, India has achieved some notable solar successes, not least becoming home to the first airport to be powered by the sun in Kochi, Kerala. India now boasts 23 gigawatts (GW) of solar capacity. Karnataka, the country’s leading state for renewable energy has seen notable growth and is currently building the 2GW Pavagada industrial solar park, the second largest solar development under construction in the world. Abhishek Gupta, president of Sunipod, a solar energy company in India, believes this growth is set to continue at an industrial and a residential level.“There are a lot of high powered consumers, both commercial and industrial, who want to use power from locally deployed solar installations, rooftop or otherwise,” he says. “Additionally because of growing awareness and increasing income levels residential solar is starting to take shape. The potential is immense and we’ve barely scratched the surface of distributed solar.” The industry, though, would seem to be at something of a crossroads. While recent news has been overwhelmingly positive, some dark clouds have started to appear. Some industry experts bemoan a lack of real support from the national government. “The solar industry is powering itself on its own,” says one industry insider, suggesting there is no coherent policy for cell manufacturing, importing solar infrastructure or for raising finance for solar power. This may seem to contradict the IEA report, but less than two weeks after it was released on 17 July 2018, India’s Supreme Court issued an order proposing a safeguard duty of 25% to be imposed on the import of photovoltaic cells for a year from 30 July, 20% for the following six months and 15% for six months after that.

Industry concerns

The solar industry is concerned this will lead to an escalation in costs and impact the sector’s growth. This is going to slow down a lot of power generation projects, says Ajith Gopi from the government of Kerala. “A number of investors are going to shy away from these projects because they have already signed up for power purchase agreements (PPAs) and if the cost of these projects is going to go up, those PPAs are going to become unviable,” says another clean energy industry source. The aim of the safeguard is to boost the production of solar power materials in India since the country has traditionally been hugely dependent on imports, largely from China, especially when it comes to inverters that convert the variable direct current output of a photovoltaic (PV) solar panel into alternating current that can be fed into the grid, and PV modules. Though there is domestic module production, Gopi questions its quality. In addition, there are various macro-economic factors that do not favour India, says Sunil Jain from Hero Future Energies, an energy company, such as a significant appreciation of the dollar against the rupee and increases in interest rates and tariffs. “As the tariffs go up, the safeguard duty is compounding the problem,” he says.

Cost effective production

But others are less gloomy, highlighting the massive decline in the wholesale cost of solar panels from $4 per watt in 2007 to less than 40 cents per watt presently, and point to the economic advantages of distributed solar, where generation and storage is performed by a variety of small, grid-connected devices rather than via a centralised system, for India. One industry source suggests that while the government’s ambitious solar targets remain “only certain players are being favoured” and that rather than looking at the benefits of solar as a distributed resource, the focus is on big solar parks in single locations. This helps back up claims that renewable targets are being met, but is actually “a nightmare for the grid because the moment there is rain, power drops drastically” with significant impact, he says. Sunipod’s Gupta is more positive about interest in distributed generation, which many see as one of the best ways to electrify remote areas in India in a cost-effective way. He says the technology is available to provide solar locally without incurring the high costs associated with traditional infrastructure. Bridge to India, an energy consultancy, estimates India will actually install about 55GW of solar by 2022, considerably lower than the government’s 100GW target, including about 44GW of utility-scale solar and 10.8GW of distributed solar. The government’s target for distributed solar power deployment is for 40GW by 2022, even though only 1.4GW was deployed by early 2017. Jain believes the government is working to achieve its solar objectives and that they will become reality helped by foreign investment — a clear renewables target, a huge electricity demand supply gap and abundant solar resources will bring in money from outside India, he says. Jain warns, however, that some slowdown could happen in early 2019 as a General Election is scheduled for the spring and the rules governing the elections ban the government from coming out with energy bids during the campaign phase. “I see a lull for four to five months early next year before a new government is formed and then the momentum moves on,” he says.

Writer: Sapna Gopal