Chennai, March 11 

India’s total installed capacity in the solar segment (including ground-mounted, rooftop and off-grid) has surpassed the milestone of 50 GW as of February this year. 

Total renewable energy capacity stood at 1,06,374 MW as of February 28, 2022, and the share of the solar segment was 50,778 MW, accounting for 48 per cent of the total clean energy capacity. In solar capacity, ground-mounted projects contributed 42,822 MW, while the rooftop segment added 676 MW. Off-grid capacity was 1,480 MW. 

The solar segment has doubled its installed capacity over three years. This fiscal alone saw the solar segment adding a total of 9,542 MW of new capacity from three solar segments. As of December 31, 2018, India’s total installed renewable power capacity was 74,786 MW, of which the solar segment accounted for 25,212 MW (including ground-mounted and rooftop). 

Capacity additions

Solar power has been witnessing significant capacity additions since FY12, led by a favourable policy framework and regulatory support from the Central government and several States such as Karnataka, Gujarat, Rajasthan, Madhya Pradesh, Tamil Nadu, Andhra Pradesh, Telangana and Maharashtra. 

The Centre has accelerated the transition to clean energy with solar adoption, which has been at the forefront leading this transformation of India’s renewable energy landscape. This has been possible due to the government’s conducive policy impetus for the renewable energy sector, Gyanesh Chaudhary, Vice-Chairman and Managing Director, Vikram Solar, told BusinessLine. 

Amid certain challenges, the momentum in the solar capacity is expected to continue as more than 40-GW solar projects are under various stages of implementation. 

Meanwhile, the Centrehas committed a 500-GW capacity addition in non-fossil capacity by 2030 to make the share of renewable energy 50 per cent. 

“The target of 500-GW renewable energy by 2030 and India’s net-zero emission target by 2070 announced at COP26 will bring incredible new opportunities for green energy growth. As domestic solar manufacturers, we are appreciative of the government’s focus to strengthen the domestic solar ecosystem and reduce India’s import dependence. This is evidenced in various policy actions such as the enhanced  PLI outlay for solar modules, notifying basic custom duties of 40 per cent on solar modules and 25 per cent on solar cells effective  April 1, 2022, the approved list of module manufacturers of solar PV modules amongst others,” said Chaudhary. 

Industry analysts point out that achieving the 2030 target would require capacity addition of over 40 GW annually over the remaining eight years.  

“Tendering this year has been comparable to last year with 15.3 GW tendered till December 31, 2021 (against 19.2 GW for FY 2021). The current pace should double if we are to achieve 40-GW annual capacity addition levels,” said Gagan Sidhu, Director, CEEW Centre for Energy Finance. 

Discussing the challenges of new capacity addition, he said capital infusion would be a major challenge – not because it’s not flowing, but because the amount of capital required to fund the targets is so immense.  

Green bonds

On this note, the Finance Minister’s announcement on India’s intention to issue sovereign green bonds is a positive development. If this can act as a catalyst that spurs the development of the domestic green bond markets, it will be a bonus. Further, policy consistency is a must – particularly, as overseas investors are key equity-funders of Indian renewable energy, Sidhu added. 

Rating agency ICRA said that India would need about .₹20-25 lakh crore investments until 2030 for achieving these targets. Investments would also be required in augmenting the transmission infrastructure to integrate renewable power with the electricity grid as well as investments to create storage infrastructure. ICRA expects the investments towards transmission infrastructure and storage capabilities to be over ₹10-15 lakh crore over the next 8-9 years. 

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