India’s renewable energy sector especially solar and wind projects have clearly emerged as the two fronts drawing maximum investments with an intact and impressive growth story being predicted by experts.
Most experts and consulting firms are betting big on India’s growth story in RE and are predicting that at least 8000- 9000 mw of new solar projects will come during 2017.
Mercom Capital Group, a global clean energy communications and research firm, which released its quarterly update on the Indian solar market on Tuesday said solar installations in India are expected to reach over 4 GW in 2016, compared to 2.3 GW installed in 2015.
Mercom said its 2017 solar installation forecast of over 9 GW. Cumulative installations including large-scale and rooftop projects in the country have already reached 9.6 GW.
On its part, another consulting firm, Bridge to India predicted that along with 1.1 GW (or 1100 mw) of expected rooftop solar capacity, India should add a total of 8.8 GW (8800 mw) in 2017, ranking it amongst the top three global markets after China and the USA.
Bridge to India said that with a pipeline of around 14 GW of utility scale projects, about 7.7 GW is expected to be commissioned in the year— a growth of around 90% over 2016.
As per Mercom, of the 4 GW to be installed in 2016, 3.7 GW are expected to be utility-scale projects and about 275 MW are expected to be rooftop projects. The country’s solar development pipeline is now more than 14.2 GW with about 6.3 GW of projects tendered and pending auction.
“We are forecasting installations to reach over 9 GW in 2017 which would put the Indian solar sector in the big leagues along with China, the United States, and Japan. However, there are significant headwinds in terms of transmission and evacuation issues that could threaten the pace of growth,” said Raj Prabhu, CEO and co-founder of Mercom Capital Group.
Bridge to India said that as the Indian market ramps up, it will become a key pillar for demand growth when demand in other leading countries including China, Japan and even possibly the USA is expected to slow down.
On the Solar tariffs, it added that these are expected to fall below the critical INR 4.00 (USD 0.06)/ kWh mark making solar power the cheapest new source of power.
At the same time, improving financial health of power distribution companies due to UDAY implementation will also help in sustaining renewable energy demand in particular. We expect sustainable demand of 6-8 GW for utility scale solar in the coming years.
Mercom has also predicted a overall positive outcome for the power sector following demonetisation move of the Government.
India’s share of solar generation continues to grow with 16.7 percent of new power generating capacity added in 2016 (as of November 2016). Solar accounted for almost one percent of electricity generated from April-October (FY2016-2017), 50 percent more than all of FY2015-2016.
The top 10 states
account for approximately 90 percent of all solar installations and pipeline; they are: Tamil Nadu, Rajasthan, Gujarat, Andhra Pradesh, Telangana, Madhya Pradesh, Punjab, Karnataka, Maharashtra, and Uttar Pradesh.