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Author: Jason Deign, Solarplaza
Entrepreneur-owned plant challenges could be delaying an imminent official announcement of plans to have 100 GW of solar power across India by 2022, Solarplaza understands.
Earlier this month India’s Power, New & Renewable Energy Minister, Piyush Goyal, said the 100 GW policy should be ready “in few days ”.
It is expected that the 100 GW will be made up of roughly 40% utility-scale, 40% rooftop, and 20% projects sponsored through the Prime Minister Solar Entrepreneur Scheme (Pradhan Mantri Surya Udhyami Yojana).
It is this final component that is likely taking the longest to finalise, says Jasmeet Khurana , head of market intelligence at the analyst firm BRIDGE TO INDIA and a speaker at the forthcoming Solar Project Development & Finance Tour India .
“The utility-scale part of the plan is already in motion and the rooftop solar plan also seems to be in the final stages,” he explains. “I think that it is the 20 GW entrepreneur scheme where the modalities are still being worked out. That might be one of the reasons the plan is not out yet. ”
The government of Indian Prime Minister Narendra Modi , which has already committed to 22 GW of installed solar capacity by 2022, announced its intention to create a scale-up plan in April.
Accountancy firm PricewaterhouseCoopers is said to be finalising the details of the proposal, which would equal an increase of 50 times over the size of the Indian market this year, or 30 times the country’s total installed capacity.
An official announcement should include small print on yearly targets, demarcation of government-supported projects and implementing authorities, Khurana told Solarplaza.
Critics will be watching to see how India, which already has a weak grid and infrastructure financing problems, will manage to achieve such an ambitious target. Khurana says the 40 GW of utility-scale projects “is perhaps the most realistic to achieve ."
The ball has already started rolling on the utility-scale side of projects, and the first tenders are already out.”
That is not to say the utility-scale segment is not without its problems. “Cost of finance is probably the biggest determinant for success in the utility-scale solar market ,” Khurana says.
“Cost of capital in India is high, and we have already seen the project development market shares tilt significantly in favour of companies with access to international capital. With most allocations based on competitive bidding, this trend is expected to continue .”
Rooftop solar is a more complex affair, but at least this part of the plan is not likely to suffer from crippling land acquisition and grid evacuation challenges. These are likely to be severe issues for the entrepreneur segment, however, since these will be ground-mounted plants.
In the face of such roadblocks, India’s Business Today this month reported that: “It will be nothing short of a miracle if the Modi-Goyal combine achieves the target .”
Khurana remains cautiously optimistic, though. “Achieving 100 GW is possible, but it needs a lot of political will to get things done, ” he says. “However, just focusing on the 100 GW number would be missing the point. "
“Solar fundamentals are so compelling in India that the sector is bound to grow dramatically. India is already on track to add more solar capacity than Germany in 2015, and enter the top five solar markets globally. The outlook for the solar sector in India is extremely positive. ”
Find out all about opportunities in the Indian solar market at the Solar Project Development & Finance Tour: India , taking place from October 5 to 9.
