Solar and its challenges in India

India needs a more comprehensive approach in order to achieve the target of 100 GW by 2022

By Pratha Jhawar
Published: Tuesday 23 April 2019
Photo: Getty Images
Photo: Getty Images Photo: Getty Images

Recently, India achieved the third rank globally for solar installation capacity. Mercom India, a clean energy research organsation, has reported that the installed solar photovoltaic (PV) capacity has reached over 28 GW as of December 2018.

However, this accounts for only about 5.5 per cent of the total global cumulative installations. India may have emerged as the third largest market for solar, but a comparison at the global front suggests that India has a long way to go in order to become a solar super power.


Mercom noted that in calendar year (CY) 2018, India added 8.3 GW of solar capacity. It has observed a 13 per cent dip from the previous year, when the solar PV installation addition was 9.6 GW. The total installations globally accounted 104 GW for CY 2018, during which China and the US added 44.3 GW and 10.6 GW respectively.

India has a target of installing 100 GW of solar capacity by 2022 and is still 72 GW short of it. To achieve this ambitious goal, a ramping up of the yearly targets is the need of the hour. Yet, the challenges are immense.

Firstly, to achieve the 100 GW target, India needs to invest $65 billion in the next four years. A major part of it has to be raised within the country, as the renewable sector could so far attract a foreign direct investment (FDI) worth only $7.5 billion in the last 18 years (2000-2018), according to a report by the India Brand Equity Foundation.

Second, the factors causing negative growth of the solar sector in CY 2018 — the confusion along the GST and the import duty on solar equipment — are yet to be resolved completely.

Thirdly, on the domestic manufacturing front, India fares worse. Various efforts by the Solar Energy Corporation of India (SECI) to attract bids for the development of the Inter-state Transmission System (ISTS) connected Solar Photovoltaic (PV) Power Plant since May 2018 has been in vain.

Despite these efforts, the Indian manufacturing sector has yet to kick-start. Therefore, the capacity addition will be done at the expense of imports. Solar cells and PV modules worth about $20 billion need to be imported in the next four years.

India needs a more comprehensive approach in order to achieve the targets of 2022 and beyond. Alternate demand has to be generated through open-access platforms in the situation when discoms are violating the Power Purchase Agreements.

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