India and US Are Major Drivers Of Utility-Scale Solar Power: ISA

The International Solar Alliance (ISA) recently released a report titled ‘World Solar Market Report’. It talks about the overall global scenario in the solar energy sector. The report placed India as one of the new undisputed leaders in global solar energy deployment. The report mentions that the global solar PV deployment had been  primarily driven by three major economies – China, India and Japan. These countries emerged as new undisputed leaders in the global solar PV deployment in the Asia-Pacific (APAC).

While China remained the uncontested global leader in that segment in 2021, installing 25.6 GW of solar power, the major drivers of utility-scale solar were the United States (US) and India. This is in contrast to China, where more solar was installed on rooftops, the ISA report said. 

The ISA report found India’s utility-scale segment more dominant. It further added that, within the new PV power plants, the additions of 11.5 GW in India captured 81% of the total PV market. This report followed the previous years’ trend. Moreover, within the large-scale solar PV, India’s pull for this segment comes from government tenders. On the other hand, among other developing countries like Latin America, the major solar markets, except for Brazil, are also governed by utility-scale solar systems, and mostly built as part of tendering schemes.

Trends Within Utility Segment Market

The ISA report found that, as India has stepped up in 2021 and installed a new record of 14.2 GW to regain the third spot which it held back in 2019. In 2020, it had dropped out of the top five, following a disappointing year in which only 3.9 GW was installed. The report indicated a trend in which there was an impressive 264% year-on-year growth in 2021. This led to a total installed solar PV capacity of 60.1 GW, reflecting an upwards trend. The utility-scale segment accounted for the vast majority of solar PV installations within which the rooftop segment represents only 6.5 GW of the country’s operational fleet.

In terms of wind and solar shares, comparing the top five average with the largest solar markets – China, the US, India, the EU-27 – and the world average, it is observed that large solar deployment in terms of absolute capacity does not necessarily mean high shares of renewable energy penetration. The report stated that China and the US have a share of 11.2% and 13.1% respectively, which is above the world average of 10.3%. Currently, India placed below the world average, at 8%, while the EU-27 is the leading region with 19.1% of its electricity coming from wind and solar.

Barriers to Deployment

The ISA report mentioned that, in India, the rooftop segment continues to struggle to take off compared to the utility-scale segment. Whereas, the installations majorly come from commercial and industrial clients, while residential installation levels are very low, the trend suggested. As the country aims to install 40% of its total fleet on roofs by 2022, it continues to lack development in the segment as a big gap in the country’s solar deployment and a missed opportunity.

There are certain barriers in purchasing modules that are currently limited to specific manufacturers, included in the Approved List of Modules and Manufacturers (ALMM). India has extended policy support to domestic manufacturing capacities, this comes at a price for developers, who can only buy from domestic suppliers, the trend suggested. Whereas, the equipment prices can be costlier than foreign manufacturers, which is disadvantageous to India which does not have enough domestic manufacturing capacities to supply its whole internal market, stated the report. Therefore, imports are still being purchased, but face a Basic Customs Duty (BCD) of 40% for modules and 25% for cells, the ISA report analysed.