View From WFES-India Risks Falling Behind In Solar and Other Renewables Push

At the World Future Energy Summit in Abu Dhabi, it was interesting to hear the views of delegates, both Indian and foreign when it came to the market attractiveness of India for renewable energy. While there is zero doubt about the emergence of the country as a renewable energy powerhouse that has even pushed many other smaller countries to accelerate their own plans, we heard far too many delegates express concern over the present state of the market here. With government owned IREDA holding fort as the strongest Indian presence, that in itself should be a cause for worry perhaps.

Thus, when we asked many of the South Korean, Japanese and even most European firms showcasing their wares in Abu Dhabi about their plans for India, the pat response in most cases was that the market is simply too ‘difficult’. Prodded further, difficult was explained as too slow, limited margins, and finally, policy uncertainty. That last comment should hurt, because we have seen multiple efforts made in India to deliver on promises made when it comes to ease of doing business. Clearly, those efforts are not convincing investors outside yet.

No India, No Problem! (Almost)

Take the issue of Basic Customs Duties on Solar imports. The politics of the move aside, it is nobody’s case that the market was ready for the move when it happened. The duty on module and cell imports, coinciding as it did with the return of normalcy after multiple covid disruptions, meant that even a one year notice from the government has failed to ensure developers could prepare themselves for the new regime. The result is the well known pile up of stuck projects, for which all sorts of ideas have been floating around, from a one time exemption on imports to a cost adjustment.  All of which seem extremely difficult to implement, going by past experience.

Expectations, as always were high for something in the medium to long term, in this case, India and its potential to be a serious player on green hydrogen.

Far too many global manufacturers have simply resigned themselves to the fact that the Indian market will take time to recover from its self inflicted slowdown. At a time when almost all other markets are booming, not too many of those global manufacturers are fussed about the fact. It is apparent that the Indian government needs to realise that this is not 2019, when missing a presence in India could seriously impact  growth plans for many of these manufacturers, driving many of them to ensure a presence even at lower margins here. As one Chinese module manufacturer that is not even in the top 5 told us, “China did almost 25 GW in just distributed solar last year, forget total solar installs, which will cross 80 GW for the year when the final numbers are in”.

With Europe and the US booming, strong momentum in the Middle east and even the South America region surprising many with its strong push, the message was clear. India is no longer the attractive market it was 3 years ago.

While we would hardly recommend or expect the Indian government to react to these views, there is certainly a case to evaluate the risk of slipping up badly on the new solar target of 280 GW by 2030, on our current base of just over 61 GW. The 61 GW is a creditable number, despite being well below the 100 GW that was the target by now. However, the next phase of our targets leave no such buffer for such large misses, as the urgency of delivering on comitted numbers increases, and the luxury of pointing to other countries relative lack of progress disappears. Quite frankly, there is no time like the present to set the tone for the rest of this decade for India.