India’s solar capacity: Milestones and challenges
- There is limited financing for residential consumers and Small and Medium Enterprises who want to install rooftop solar systems.
- India’s focus on large-scale solar PV fails to exploit the many benefits of decentralised renewable energy options.
- India has now surpassed 50 GW of cumulative installed solar capacity.
- This is a milestone in India’s journey towards generating 500 GW from renewable energy by 2030, of which 300 GW is expected to come from solar power.
- India’s capacity additions rank the country fifth in solar power deployment.
Why is India falling short in roof-top solar installations?
- The rise in large, ground-mounted solar energy is indicative of the strong push towards increasing the share of utility-scale solar projects across the country.
- The large-scale solar PV focus fails to exploit the many benefits of decentralised renewable energy (DRE) options, including reduction in transmission and distribution (T&D) losses.
- One of the primary benefits of solar PV technology is that it can be installed at the point of consumption, significantly reducing the need for large capital-intensive transmission infrastructure.
- India needs to deploy both large and smaller-scale solar PV, and particularly needs to expand RTS efforts.
- There is limited financing for residential consumers and Small and Medium Enterprises (SMEs) who want to install RTS.
- Coupled with lukewarm responses from electricity distribution companies (DISCOMS) to supporting net metering, RTS continues to see low uptake across the country.
- Governments, utilities, and banks will need to explore innovative financial mechanisms that bring down the cost of loans and reduce the risk of investment for lenders.
- Increased awareness and affordable finance for RTS projects could ensure the spread of RTS across the scores of SMEs and homes around the country.
- Aggregating roof spaces could also help reduce the overall costs of RTS installations and enable developing economies of scale.
Challenges to India’s solar power capacity addition
- The utility-scale solar PV sector face challenges like land costs, high T&D losses and other inefficiencies, and grid integration challenges.
- There have also been conflicts with local communities and biodiversity protection norms.
- While India has achieved record low tariffs for solar power generation in the utility-scale segment, this has not translated into cheaper power for end-consumers.
State of India’s domestic solar module manufacturing capacity
- Domestic manufacturing capacities in the solar sector do not match up to the present potential demand for solar power in the country.
- Backward integration in the solar value chain is absent as India has no capacity for manufacturing solar wafers and polysilicon.
- Low manufacturing capacities, coupled with cheaper imports from China have rendered Indian products uncompetitive in the domestic market.
- It can be corrected if India embraces a circular economy model for solar systems.
- It would enable solar PV waste to be recycled and reused in the solar PV supply chain.
- By the end of 2030, India will likely produce nearly 34,600 metric tonnes of solar PV waste.
- India could develop appropriate guidelines around Extended Producer Responsibility (EPR)
- This could give domestic manufacturers a competitive edge and go a long way in addressing waste management and supply-side constraints.
- As India attempts to deal with some of the shortcomings, India’s solar story will continue to provide important lessons for other developing countries that are looking to transition to clean energy.
- In addition to an impressive domestic track record, through the International Solar Alliance (ISA) established by India and France at COP-21 in 2015, there is a global platform to bring countries together to facilitate collaboration on issues such as mobilising investments, capacity building, program support and advocacy and analytics on solar energy.
- Technology sharing and finance could also become important aspects of ISA in the future, allowing meaningful cooperation between countries in the solar energy sector.