What's likely to make the Indian Solar industry grow faster?

Thirty-five new tenders with a cumulative capacity of 15.5GW have been announced in the last year. How will the Indian solar market grow with this huge opportunity?

- Sudeshna Das

With the addition of 5.4GW of solar power generating capacity in 2016, India is going to become the fourth largest solar market globally, behind only China, USA and Japan. Moving forward, this will help the country to achieve its ambitious goal of installing 100GW of solar energy capacity under the Jawaharlal Nehru National Solar Mission (JNNSM) by 2022. India crossed 5GW of solar PV installed capacity in 2015. This includes 4.7GW (more than 90 per cent of total installation) of utility-scale solar and 525MW of rooftop solar power capacity. This sector has the potential to play an important role in the country’s economy and also create employment opportunities for millions of people.

This article gives an overview of India’s solar market, and focuses on the growth drivers, opportunities and disabilities to local manufacturing.

The India advantage

Supported by some key policy revamping and increased investor interest, both from Indian and international developers, the Indian solar market seems ready to peak soon. There are some signals that point to a solar boom in the short term (Table 1). The major factors boosting current and future growth in the solar energy segment can be bracketed under the following three major categories:

1. Domestic demand

2. Better average solar irradiation

3. Policy support

Domestic demand: One of the main reasons the solar industry is growing in India is the fact that the country itself is developing. Good power supply is one of the key enablers of development. India’s power requirement is expected to grow by more than 5 per cent over the next decade, while supply is projected to fall short by 3.6 per cent. Since traditional energy sources are not enough to match the pace of growth in demand, there is a need to look for alternatives – and solar energy fits the bill.