India’s solar capacity: Milestones and challenges

Contact Counsellor

Last Updated16/03/2022

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.

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.

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.

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.