This year, Solar Energy takes the biggest chunk in contribution in the electricity addition in India.The contribution is accounted to be 39% or 7,100 megawatts (MW) to overall capacity additions, according to the data accumulated by Mercom Capital Group, a US-based research and consulting firm. To compare consider it against the capacity additions that stood around 4,313 MW in all of 2016. The country now has a total capacity of around 14.7 gigawatts as reported in September, 2017.
Narendra Modi government’s push for renewable energy has also backed the boom in Solar Power capacity. The target is of installing 175 GW of renewable energy by the end of 2022. “Last year (financial year 2016-17) was a landmark year in the Indian power sector… for the first time, the capacity addition in renewables sector was more than conventional and the same is likely to continue even this year,” told Amit Kumar, partner at consulting firm PwC, to Quartz.
A peak in India’s demand for coal is expected by 2027, as per a research by the Institute for Energy Economics & Financial Analysis (IEEFA), a US-based research institute, the Financial Times reported. All this demand will be replaced by renewables, which the IEEFA predicts will account for 27% by 2027.
During the last few months new problems are observed by the developers. They are battling issues ranging from lack of power transmission infrastructure, rise in cost of solar module, lackluster power demand. “Even though the Indian Solar market is on pace for a record-breaking year, the momentum has definitely slowed,” said Raj Prabhu, Mercom Capital Group’s CEO.
For instance, around 1,000 MW of large-scale projects are there which are waiting for getting connected to the grid and they haven’t been commissioned because of delays by the government, as per the Mercom report. The sector is also facing the confusion about the new tax –Goods and Services Tax on solar plant components and various states’ demands to renegotiate older power purchase agreements (PPAs). Another change in policy is expected by the sector that would be an imposition of anti-dumping duties on imported panels, maybe after a few months.
As a consequence, only 7,100 MW of capacity has been achieved by the sector which 3,000 MW short of the target aimed by MNRE (Ministry of New and Renewable Energy). “The fourth quarter of 2017 will be a crucial one for the solar sector in many ways, considering the anti-dumping recommendations due to be released, the uncertain trajectory of module prices, and low power demands,” added the Mercom report.