India’s sudden solar storm

India’s rapid solar boom is slowing as grid constraints, weak demand growth, stalled contracts and rising storage needs push the sector into a recalibration phase

- SUDHEER PAL SINGH

The past few months have seen an upheaval in India’s solar power sector.

What was until recently a sunrise sector drawing record investments and adding new capacity at a record pace, has suddenly skidded to a phase of consolidation and recalibration, with the government saying it may not make sense to go for large-scale renewable energy bids amid a flattening of project pipelines. While the government aimed for a national target of tendering 50 gigawatt (Gw) annually with the larger aim of reaching 500 Gw of installed non-fossil fuel-based generation capacity, the country is now adding only 15-25 Gw capacity annually.

To be sure, the country’s overall renewable energy capacity has jumped multifold from a mere 35 Gw in 2014 to 197 Gw at present. The past 11 years have witnessed growth in capacity creation at a pace unparalleled in India’s energy sector. On October 22, the ministry of new and renewable energy (MNRE) issued a statement saying such exponential growth inevitably reaches a point where the next leap requires not just more megawatts, but deeper system reforms.

“The sector has entered that phase, where the focus is shifting from capacity expansion to capacity absorption,” the MNRE said in a statement.

“We are now dealing with grid integration, energy storage, hybridisation, and market reforms, the real foundations for a 500 Gw plus non-fossil future. In that sense, the recent moderation in capacity addition is a recalibration, a necessary pause to ensure that future growth is stable, dispatchable and resilient.”

In other words, a confluence of factors has come into play, all at the same time, making it necessary to redraw priorities, projections, and policy focus.

From surge to slowdown