India Will Surpass 100 GW of Solar Installed Capacity By Early 2024: Report

EU Action Plan Proposes 40% Investment In Electricity Grids Till 2030

A study entitled ‘Global Market Outlook For Solar Power 2023-2027’ (With a Focus on South East Asia) has been released. The major findings of the insightful report are as follows-

Top Five Countries in Installations

The top five countries that added solar installations in 2022:

1. China: 100 GW (Approx)

2. US: 21.9 GW

3. India: 17.4 GW

4. Brazil: 10.9 GW

5. Spain: 8.4 GW

2022 saw record installations, driven by a remarkable performance in China, the undisputed world-leading solar market, with almost 100 GW added in a single year and a huge 72% annual growth rate. The US experienced a turbulent year in 2022, but kept its spot as the second largest market despite a 6% annual decrease to 21.9 GW. India’s rebound continued in 2022, with 17.4 GW of new installed capacity and a 23% growth. Brazil doubled its installation rate with 10.9 GW, while Spain became the largest European market with 8.4 GW.

India Poised for 20 GW Addition

According to the National Solar Energy Federation of India (NSEFI), there should be a significant increase in solar adoption in India. The study states that India will add at least 20 GW, with potential up to 35 GW, of solar capacity every year starting from 2023. NSEFI predicts that India will surpass the 100 GW of solar installed capacity by early 2024, making it one of only four countries in the world to achieve this milestone.

Challenges Before India’s Solar Sector

The introduction of the Basic Customs Duty (BCD) on April 1, 2022, which imposes a 40% duty on imported modules and a 25% duty on imported cells, posed a challenge for the projects that were bid before the announcement of the duty on March 9, 2021. Ultimately, projects face an immense financial burden with these high tariffs.

Another challenge is the lack of transmission infrastructure. As the pace of solar installations accelerates, the availability of commensurate transmission infrastructure is a key challenge. There is a significant mismatch in the timelines for solar project commissioning, and transmission line commissioning. This issue needs to be rectified and aligned for India to achieve its ambitious solar targets.

Outlook: Hopes & Expectations

The report says that in order to achieve the 280 GW goal by 2030, India needs to add approximately 20-30 GW of solar power every year, beginning from 2023. In March 2023, the Indian government announced a bidding trajectory for renewable energy projects.

The study states that India is on track to become one of the largest manufacturing hubs for solar products, due to the implementation of PLI I and PLI II schemes. The country is expected to build 100 GW of solar manufacturing capacity by 2027.

The Indian government introduced the Production Linked Incentive (PLI) Scheme in 2021, with an outlay of 4,500 crores rupees (503 million EUR), which will add around 10 GW of fully integrated solar manufacturing capacity by December 2024. This scheme received a very encouraging response, and was oversubscribed in 2021. In order to accommodate the increasing demand for solar modules, the government has approved a second tranche of the scheme (PLI II) in 2022. PLI II had a total cost of 19,500 crores rupees (2.18 billion EUR).

The government rolled out the bid for this PLI II in November 2022. As of March 2023, the government has allocated a total capacity of 39.6 GW of domestic solar PV module manufacturing to 11 companies.

Solar Rooftop

At the end of 2022, India reached 8.8 GW of cumulative installed solar rooftop capacity. The state of Gujarat led in deployment with a 24% share of the total solar rooftop installations, followed by Maharashtra (14%), and Rajasthan (9%). In 2022, over 2 GW of solar rooftop tenders were issued, representing a 90% increase.

In July 2022, the Indian government implemented Green Open Access Rules in the C&I segment, to further accelerate the country’s ambitious renewable energy programmes. Through this measure, the limit for open access transactions was reduced from 1 MW to 100 kW. This prompted the industry to install around 2.5 GW of solar open access in 2022, a 92% increase from the 1.3 GW installed in 2021.

India reached 8.8 GW of cumulative installed solar rooftop capacity at the end of 2022. The state of Gujarat led in deployment with a 24% share of the total solar rooftop installations, followed by Maharashtra (14%), and Rajasthan (9%).

In 2022, over 2 GW of solar rooftop tenders were issued, representing a 90% increase.

Agrisolar

India set a target to install a total capacity of 4,886 MW of small solar power plants co-located with agriculture, under the framework of the KUSUM scheme. These installations range between 500 kW and 2 MW, and are installed on or near farmlands located within a 5 km radius from the substation. As of 2022, 48.2 MW of solar capacity has been installed on or near agriculture farmlands.

The report can be accessed here.