India’s power sector is on the rise like never before to equip the demands of a rapidly developing economy. Solar plays a huge part in enabling the Government of India’s vision of ensuring 24×7 affordable and quality power for all. India’s solar market, the third largest in the world, is poised to grow even bigger with the government hoping to achieve the target of 100 GW by 2022.
So far over 26 GW of solar PV capacity has been installed in India, and there is a big deficit of over 73 GW of solar capacity. In global ratings, India is the third largest solar market behind China and the United States, as of 2018. Japan and Germany were the fourth and fifth largest solar markets in the world. India’s solar installations reached 8.3 GW, including large-scale and rooftop solar units, according to a report.
The country’s cumulative solar capacity is 28 GW as of 31st March 2019[DR3] . Mergers and acquisitions globally were steady in this space with 18 solar transactions [DR4] in the first quarter of this calendar year (Q1 2019) compared to Q1 2018.
Though India had its best quarter at the start of 2018, in which it surpassed the U.S for the first time in terms of solar installations, this three-month period is the first time that India has installed over 3 GW.[ND5] Having said that, India still has some catching up to do with China. In 2018, China added 44.3 GW of solar PV capacity, more than five times that of India during the year, according to data released by the country’s National Energy Administration. This was in spite of an installation cap on distributed projects and reduction in the feed-in tariff for solar projects announced last year. The United States was the second largest market with 10.6 GW of solar PV capacity addition in 2018, according to SEIA/Wood Mackenzie
Latest data show that the top three solar markets in the world – China, India, and the US together installed a combined 15.4 GW of solar PV capacity in the first three months of 2018 (January to March). According to data published by NEA, China installed 9.7 GW in Q1 of 2018, followed by India with 3.3 GW and, according to a recent report released by GTM Research and Solar Energy Industries Association (SEIA), the US installed 2.5 GW in Q1 2018.
In Q1 2019, we see a dip in China’s installations, at 5.2 GW, representing a reduction of 46% y-o-y. Data from the other markets for 2019 is awaited.
As of February 2019, total renewable power installed capacity (excluding large hydro) in India stood at 75.06 GW. Off-grid renewable power capacity has also increased to 916MW. With a potential capacity of 363 gigawatts (GW) and with policies focused on the renewable energy sector, Northern India is expected to become the hub for renewable energy in India.
The Government of India is committed to increase use of clean energy sources and is already undertaking various large-scale sustainable power projects along with promoting green energy heavily. In addition, renewable energy has the potential to create many employment opportunities at all levels, especially in rural areas. The Ministry of New and Renewable Energy (MNRE) has set an ambitious target to set up renewable energy capacities to the tune of 175 GW by 2022 of which about 100 GW is planned for solar, 60 for wind and the remaining being for hydro, bio among other.
India’s renewable energy sector is expected to attract investments of up to US$ 80 billion in the next four years. Capacity addition has seen an 8-fold increase.
“China, the United States, and India will continue to be the most important solar markets in the near future. Both solar upstream and downstream companies will need to pay close attention and have a long-term strategy for each of these markets,” said Raj Prabhu, CEO of Mercom Capital Group.