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Published:June 18, 2019 10:04 PM
For Indian Solar sector, 2018 has been an attempting year with Policy change in China, tender cancellations and tax/duties being levied upon the domestic solar panels manufacturing sector. Almost 35 GW of Solar projects were tendered between Jan-September 2018 in India, whereupon just 13 GW projects were auctioned towards the finish of 2018. However, India has installed additional 7.1 GW Solar in FY 2019. In any case, FY 2020 guarantees to bring more chances and better outcomes for Solar panel installments in the nation. Currently India has 29.4 GW solar installed capacity. Presently, Solar has 36.7% share in India’s Renewable installed capacity. India is hoping to add 10 GW to 15 GW renewable energy capacity in 2019, out of which Solar would represent the significant part. New solar energy park development and achieving operational status will play a major role in adding solar capacity in 2019. While the Government’s focus on rooftop solar power growth will lead to increase in awareness and involvement of common man into the transition. India is expected to add nearly 2 GW of new rooftop solar energy capacity, which will double rooftop Solar’s growth trajectory from 2018. Energy storage market is expected to get a boost as rooftop solar projects become more viable for industry, commercial, and residential consumers. The states like Rajasthan, Andhra Pradesh, Tamil Nadu and Karnataka will keep on adding to Indian Solar based development and is relied upon to represent over 75% solar based capacity addition in 2019. Floating solar power projects will gain priority in 2019 and research indicates that near about 80 MW of new floating solar capacity is expected to be added within this current year. Challenges in Path Although, there are new opportunities ahead for solar energy to grow, there are several challenges as well like power evacuation and distribution issues, safeguard duty, Poor response to projects that are standing in path to fasten up solarization of the country. The 25% safeguarding duty applied to solar cells and modules from China and Malaysia has caused the slowdown of solarization in India. There is a fall of 27.8% in the amount of new solar capacity added last year, compared to 2017. The imposition of safeguard duty has also affected the tariff of solar projects in India. After July 2019, the safeguard duty will decrease by 5% which will be a small relief for project developers across the country. The big auctions linked with manufacturing capacity are unsuccessful to attract the bidders. A 10 GW tender got cancelled due to no response from industry players. Similarly, 6 GW solar tender is also getting extensions and till now got no response. Indian government is unlikely to renew safeguarding duties after two years, due to their lack of effectiveness in boosting domestic solar manufacturing. The Investment in Solar Renewable energy sector has also become an issue due to lack of evacuation infrastructure and poor distribution problem. The performance of State Discoms has always been a concern and expanding gap between dues payment against power purchase cost has been increasing notably. Way Forward The Indian government has set up schemes to support solar – including new capacity for government use; Increased renewable power obligations; waiving inter-state transmission charges for solar and wind projects for 25 years; drawing up a new National Electricity Plan to develop transmission systems and incorporate 175 GW of renewables into the grid by 2022; and implementing KUSUM program to help farmers install solar pumps and grid-connected PV projects. That is all on top of the aggressive growth targets and large number of capacity tenders being held, particularly for the development of solar parks and ‘ultra-mega’ solar projects. An increasing focus on rooftop solar also has the potential to bypass the land availability and acquisition. The government has implemented a string of programs to promote rooftop solar which offer financial support and subsidies for residential, social and institutional PV systems. The imposition of safeguarding duty on Chinese and Malaysian products has caused significant rise in cell import volumes from Thailand and Vietnam. The Developers will be able to seek alternative sources of cheap solar equipment against a backdrop of falling prices. Though, the government has clarified on applicability of GST from 1st Jan 2019 and recently released CPSU scheme to promote domestic manufacturers, yet more efforts are needed to support solar. The government has also attempted to reduce the financial risks and implementation costs associated with solar project development by improving the facilitation of concessional loans from lenders such as the World Bank and the Asian Development bank which have committed strong financial support. Upcoming short term market power sale of solar will give a boost to solar energy in India. With all the support might be able to reach 100 GW solar target till 2022.
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