Here is some not-so-good news for solar power developers.
Every year, a Slovakia-based service provider, Solargis, comes out with a report on solar irradiance — how much sunlight falls on a square metre of earth’s surface. It also records the difference between two parameters — global horizontal irradiance (GHI) and long-term average (LTA) irradiance.
GHI is a measure of the total sunlight received by a unit area, including direct and diffused light, which is used to determine the solar energy potential of a given spot.
What Solargis said about India is not encouraging. The difference between GHI and LTA has been reducing in the last few years.
“In 2024, most of India experienced a decline in solar irradiation by 3% to 10%, marking another year below average. India’s 2024 monsoon season was one of the wettest in recent years, with rainfall exceeding the long-term average (LTA) by nearly 8%. While this was beneficial for agriculture and water reservoirs, it posed significant challenges for solar energy production,” its report stated.
It further notes that “increased cloud cover, prolonged rainy periods, and extreme weather events reduced the availability of sunlight, particularly in regions like central India and the Western Ghats. Regions such as Gujarat and Maharashtra — key hubs for solar power — experienced extended periods of below-average irradiation due to persistent cloud cover”.
Wake-up call
The 10 per cent drop is worrying, because it means that solar generation can fall below ‘P90 yield levels’ — namely there is a 90 per cent chance that the actual energy yield will be equal to or higher than the P90 value, and a 10 per cent chance that it will be lower.
“This can trigger viability concerns, inability to service debt, breach of financial covenants, resizing of debt and also trigger minimum guaranteed generation metrics in the PPAs,” says Vinay Pabba, CEO of Vibrant Energy, a renewable energy company.
People around the world have noted Solargis’ numbers. “This is a crucial analysis and a wake-up call for the solar sector in India,” says Susana Gutierrez, Managing Director of Kai Energy Capital, Columbia, who describes the numbers as “concerning”.
So far, there is little evidence that generation per MW of installed capacity has fallen, but that could change in the future.
Many, including Pabba, attribute the falling GHI-LTA difference in India to climate change, which has upended precipitation projections. You never know when a region may get unexpected rainfall, dampening solar generation.
“Due to climate change, weather patterns are changing in many places,” notes MK Singh, founder and CEO of Bengaluru-based climate consultancy Net Zero Think. “We did a modelling a few years ago and found that wind, solar and hydro — all weather-dependent resources — do not follow past trends,” Singh tells businessline.
He cautions that it is imperative to factor in climate change before investing in renewable energy projects.
Technology selection
Solargis’ 2024 analysis has shaken up the Indian solar industry.
Sujoy Ghosh, Country Head, First Solar, a US-headquartered solar module (thin film) manufacturer with a factory near Chennai, cautions that “overestimating the weather will adversely impact project returns for the investor”. Ghosh says the Solargis report “brings into focus the diligence needed in technology selection to prioritise life-cycle energy yield versus initial nameplate efficiency”.
“The variability in climate and departure from historically modelled trends will introduce some uncertainty in predicting solar energy generation,” notes industry veteran Pashupathy Gopalan, who is now co-Chairman and CEO of Fenice Energy, a company that specialises in rooftop solar plants.
“Last year seems to have been lesser-than-expected solar irradiation in India because of heavier-than-normal rainfall. Investors will need to account for such variability and perhaps use P90 estimates when making investment decisions. This will marginally drive up the tariffs,” he says.
So, what can one do? You cannot control the sun, nor can the climate change problem be addressed quickly.
In his LinkedIn post, Pabba describes the fall in solar irradiance as “the hidden challenge facing India’s solar farms”. Perhaps the first step in finding a solution is to recognise the problem.
The answer is to find and use technologies that raise generation at least to the extent of countering the falling irradiance.
High-efficiency modules, such as perovskite-silicon tandem modules, which absorb a wider spectrum of light and can pick up some energy even in diffused light, may offer a solution. The perovskite-silicon cells raise sunlight-to-electricity conversion efficiency from today’s 22-23 per cent to above 30 per cent. While perovskite-silicon tandem cells are a good five years from hitting the market, heterojunction (HJT) cells may serve the industry’s immediate needs.