Context: India added a record 10 Gigawatt (GW) of solar energy to its cumulative installed capacity in 2021.  

Current Trends

• India has now surpassed 50 GW of cumulative installed solar capacity, as on 28 February 2022. 
• India has targeted to generate 500 GW from renewable energy by 2030, of which 300 GW is expected to come from solar power.
• India’s capacity additions rank the country fifth in solar power deployment, contributing nearly 6.5% to the global cumulative capacity of 709.68 GW.

Key Challenges

Roof Top Solar (RTS) system

• Out of the 50 GW installed solar capacity, 42 GW comes from ground-mounted solar photovoltaic (PV) systems, and only 6.48 GW comes from rooftop solar (RTS), and 1.48 GW from off-grid solar PV.
• India is falling short in roof-top solar installations.
• RTS deployment stands far short of the Union Government’s target of 40 GW of RTS by the end of 2022.
• The large-scale solar PV focus fails to exploit the many benefits of decentralized renewable energy (DRE) options.
• This includes a reduction in transmission and distribution (T&D) losses.
• There is limited financing for residential consumers and Small and Medium Enterprises (SMEs) who want to install RTS.

Solar PV sector

• The utility-scale solar PV sector continues to face challenges like land costs, high T&D (Transmission and distribution) losses, and other inefficiencies, and grid integration challenges.
• There have also been conflicts with local communities and biodiversity protection norms.
• While India has achieved record low tariffs for solar power generation in the utility-scale segment, this has not translated into cheaper power for end-consumers.

Solar module manufacturing capacity

• Domestic manufacturing capacities in the solar sector do not match up to the present potential demand for solar power in the country.
• As per the CRISIL report, India had a 3 GW capacity for solar cell production and 8 GW for solar panel production capacity.
• Backward integration in the solar value chain is absent as India has no capacity for manufacturing solar wafers and polysilicon.
• In 2021-22, India imported nearly $76.62 billion worth of solar cells and modules from China alone.
• Low manufacturing capacities, coupled with cheaper imports from China have rendered Indian products uncompetitive in the domestic market.

Achievements

• India has established International Solar Alliance with the support of France.
• It is a global platform to bring countries together to facilitate collaboration on issues such as mobilizing investments, capacity building, program support and advocacy, and analytics on solar energy.

Key Suggestions

• India should embrace a circular economy model for solar systems.
• This would allow solar PV waste to be recycled and reused in the solar PV supply chain.
• By the end of 2030, India will likely produce nearly 34,600 metric tonnes of solar PV waste.
• Governments, utilities, and banks will need to explore innovative financial mechanisms that bring down the cost of loans and reduce the risk of investment for lenders.
• Increased awareness and affordable finance for RTS projects could potentially ensure the spread of RTS across the scores of SMEs and homes around the country.
• Aggregating roof spaces could also help reduce the overall costs of RTS installations and enable developing economies of scale.

Road Ahead

• International Solar Alliance (ISA) can bring countries together to facilitate collaboration on issues  while technology sharing and finance could also become important aspects of ISA in the future, allowing a meaningful cooperation between countries in the solar energy sector.

By: Shubham Tiwari