With 8.8 GW of projected capacity addition (growth of 76 per cent over 2016) in 2017, India is set to become the third largest solar PV market, overtaking Japan, according to a report by solar energy consulting firm Bridge to India.

By the end of 2017, India’s solar power capacity is expected to touch 18.7 GW, which will be about five per cent of global solar capacity, growing by 89 per cent over last year.

As of March 2017, India had installed 12.2 GW of utility scale solar capacity.

“Indian solar market has grown by an average 72 per cent in the last three years and is now worth about 8-9 GW per annum,” said Vinay Rustagi, Managing Director, Bridge to India.

“Growing market size and strong government commitment to the sector have attracted the world’s leading private sector players as well as resulted in lower tariffs for consumers,” he added.

“As the sector matures, however, there is a formidable new challenge arising in the form of how to absorb rising share of intermittent energy into the grid,” Rustagi felt.

Bridge to India’s second edition of ‘India solar CEO survey’ highlighted that the solar industry is more optimistic about growth prospects but at the same time more circumspect about their individual business outlook because of growing competition and squeezed profitability.

However, there is more optimism about rooftop market with an expectation of 12 GW (CAGR 41 per cent) to be added by 2021.

The biggest concern for the sector is grid integration of growing renewable capacity followed by poor financial condition of discoms, notwithstanding the progress made on UDAY reform package.

Also, about 45 per cent of the respondents feel that poor net metering implementation remains a major challenge for the growth of the rooftop solar market.

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