Solar Energy Market Landscape in India & Outlook till 2030

Solar Energy Lands in India 2022 -
A Know How

Solar energy in India - an exemplary rise of 30 times in the installed capacity over the last decade

Market Research Report 2022 Exhibit 1: Share of solar energy in total RE Installed capacity of India in FY 2022 4% 35.6% 9% 0.4% 51% Small Hydro wind power Biomass Waste to energy Solar Power 114 GW Total RE Installed Capacity of India, Oct 2022 Source: Eninrac Research, MNRE 4% 27% 49% 0% 20% 40% 60% Mar' 2012 Mar' 2017 Mar' 2022 Improvement in the share of solar in total RE capacity of India India renewable energy (RE) sector has encountered a growth rate of 14% in five years, from FY 2017 to FY 2022.This growth takes India to achieve milestone of 114 GW of RE capacity as of Sept 2022. Of this total recorded capacity contribution of solar stands to be approx. 51%.The share of solar installed capacity in India has increased at a CAGR of 29% over the last decade from FY 2012, making it to rise from 4% to 51% (as of Sept. 22). Presently, the solar installed capacity of India is 57 GW. Some of the key contributing states to this capacity are -Rajasthan (15 GW), Gujarat (8 GW), Karnataka (7.7 GW), Tamil Nadu (5.8 GW) and Telangana (4.6 GW). Cumulatively these states drive nearly 69% of overall solar installation in the country.

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The transformation that solar energy sector has witnessed in India over the last decade has been purely due to the impetus given by government of India (GOI) with aggressive capacity targets, dedicated policies and regulatory support. For example, the ambitious target of 280 GW of solar capacity has been set to be achieved till 2030, which means 5 times growth in the solar installed capacity in coming seven years from now.

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This anticipated growth in capacity addition clearly indicates an expansive upcoming business opportunity for the entire solar value chain in India, especially manufacturing. GOI has already initiated the steps to boost the domestic solar manufacturing in the form of Production Link Scheme (PLI).
To establish a larger manufacturing base for solar PV modules, an allocation of  INR 19,500 crore (Tranche II) for PLI for manufacturing of high efficiency modules, with priority to fully integrated manufacturing units from polysilicon to solar PV modules, has been announced in the Union Budget 2022-23, on 1st Feb 22.
Lately in Sept. 22, SECI has also floated a proposal for inviting the bids under the desired scheme. It is anticipated that the PLI scheme shall lead to an installed manufacturing capacity of 65 GW per annum (Tranche II) in India. It is important to note that the total domestic capacity for manufacturing solar modules in India is about 20 GW, of which 13.3 GW has been enlisted in ALLMM. The current capacity of manufacturing solar cells in the country is around 4 GW.

Why Indian Solar Sector is catching eye-balls?

Abundance of solar resource potential (784 GW ground mounted), advancement in solar modules technology globally, falling solar power tariff and supportive government policies etc. can be seen as some of the key factors that have gained attraction from the industry players time to time in India. Having said that some of the major reasons that have transformed India’s solar energy space within a time frame of 5-6 years are –(1) More focus on large solar capacities, in the form of developing solar parks and solar UMPPs- an ambitious target to setup 40 GW of Utility scale solar power projects by end of FY 2022. Of this total targeted capacity, nearly 10 GW has been commissioned so far. This scheme attracted investment from industry giants such as Adani. It is significant to note that of the total awarded solar park capacity in India, 1750 MW has been allotted to Adani, of which 849 MW has been already commissioned in the Rajasthan. (2) Grid Connected Solar Rooftop Programme– under this scheme a cumulative capacity of 40 GW from solar rooftop projects was set to be achieved by end of 2022, which has now been extended to be achieved by 2026.

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(3) Green Open Access regulation- Under this scheme, The reduction of Open Access Transaction limit from 1 MW to 100 kW and appropriate provisions for cross-subsidy surcharge, additional surcharge, standby charge, will incentivize the common consumers to get green power at reasonable rates. (4) Increased target of solar RPO- A significant jump in the solar RPO targets has also pushed the development of solar energy across the Indian states. It is important to note that the solar RPO target increased from 2.7% in 2016-17 to 10% in 2021-22. For year 2022-23 it is fixated at 23.4% and is further anticipated to increase to 33.5% by year 2029-30.

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