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India has reached its milestone for cumulative solar capacity of 20GW after achieving the milestone 4 years ahead of it time. The government has decided to raise the bar to 100GW by 2022.
Modi Government has believed in solar power as installations had reached 9.6 GW in the year 2017, India solar capacity has quadrupled over the years.
This is nothing compared to China which has a cumulative capacity of 360GW accounting to 40% of global solar output.
Rooftop solar may have been the fastest growing division of renewable energy, but the Prime Minister abridged the rooftop solar capacity from 5000MW to 1000MW as the division underperformed after reporting capacity of 982 MW in December.
This specific division is underperforming as these policies are exclusively designed for industrial rooftops and not residential rooftops. Residential house owner switching to rooftop solar from electricity distribution companies is not a practical alternative. Discoms in some cases don’t allow users to switch to rooftop solar.
India is the largest buyer of solar equipment from China. China may impose 7.5% tax on imported solar panels.
Several projects faced delay due to increased costs after custom officials blocked panel shipments for more than a month for demanding higher import duties.
The 70% increase in safeguard duty may drive up the price where States might hold to buy solar equipment. Government should provide more capital for solar power developers and solar parks.
This could clash with Prime Minister Modi plan of achieving 100 GW of solar energy by 2022, as India has depended on China for its cost efficient equipments. This is creating an atmosphere for slowing down installation activity.
According to Indian Ministry of New and Renewable Energy (MNRE), the country’s renewable capacity including solar wind biomass and small hydro grew by 11.2GW in 2017. India also increased its solar capacity by 83% in 2017.
This goal was achieved by startups and entrepreneurs of Indian business ecosystem. Indian states that are leading in solar installations are Andhra Pradesh, Karnataka, Rajasthan and Telangana.
Indian Renewable Energy Development Agency (IREDA), World bank and Ministry of New and Renewable Energy has authorized to invest 100 million for Mega solar parks in India to achieve their goal of 100 GW by 2022.The two parks that are situated in the Madhya Pradesh are planning to generate 750 MW Rewa solar park and 250 MW Mandsaur solar park.
Industry experts predict that Solar projects might turn into non performing assets due to the imposition of 70% safeguard duty on import of solar equipment. This might jeopardize various projects that are currently under development. This imposition might even interfere with the Prime Minister Modi’s target to install 100 GW of solar capacity.
The central government has invited tenders for construction of solar power projects of 2000 MW connected to interstate transmission system.
There is still some uncertainty on how the solar industry will react to 70% safeguard duty and 7.85% of import tax duty.