India Solar Power Market by Photovoltaic - Growth Trends and Forecasts (2018 - 2023)
India has great potential for generation from renewable energy sources, including wind, solar, biomass, small hydro, and cogeneration bagasse. India's renewables industry has rapidly expanded following the election of Narendra Modi - an avid supporter of renewable energy - as Prime Minister in May 2014, and the solar sector, in particular, has surged - in line with the country’s scaled-up renewable energy targets. India aims to install 175GW of renewables capacity by 2022, of which 100GW is outlined for solar power. India is an outperformer for solar power investment globally; and the increasing cost competitiveness of solar generation will support strong growth in the sector over the coming decade. The solar capacity in India is expected to grow at an annual average rate of 16.0% between 2018 and 2026.
Strong Government Support - Driving the Solar Power Market in India
The solar sector's outperformance in relation to the wind sector is in part a result of the supportive regulatory framework set up by the government, to encourage investment into the market and the government's strong commitment to expanding solar power in the country. The Modi administration aims to install 100GW of solar capacity by 2022, and has prioritized the expansion of solar over other renewables technologies. Specifically, the government launched a reverse auction system for solar capacity, and this has been successful in attracting investors into the market - strengthening the project pipeline. The government has increased the availability of funding to the renewables sector, and allocated concentrated zones of development for solar power facilities (ultra-mega solar power projects - UMSPP) to de-risk project development, by driving down the implementation time and cost of projects. The Indian solar market is set to grow significantly in the next five years, driven mainly by increasing power demand and prices for fossil fuels, the ambitious National Solar Mission (NSM), various state level initiatives, decline in installation cost of system, renewable energy quotas including solar energy quotas for utilities as well as the falling international technology costs.
Rooftop solar - Fastest Growing Solar PV Segment
The total rooftop PV capacity during FY2017, in India, crossed 1 GW, representing a tenth of the total solar PV installations. The rooftop solar PV market has grown at a CAGR of 110% between FY 2013 and FY 2017. The growth in rooftop solar installations in India is majorly driven by savings in electricity bills and increasing consumer acceptance, along with fierce competition in the market. To achieve the government’s target 40GW by 2022, the pace of new installations need to double every year between 2017 and 2022. In 2017, more than 1GW rooftop PV projects were auctioned by various government bodies, due to a strong policy push by national and local governments. About 70% of these projects were under the renewable energy service company (RESCO) model. Tata Power, Cleanmax Solar, Vikram Solar, RelyOn Solar are some of the major players active in the rooftop solar installation segment, in India.
Key Developments in the market