The rooftop eclipse on India’s solar ambitions

Of the 100 GW, 60 GW was to come from utility-scale solar plants, which stood at 41.7 GW, or 70% of the target, by 2021.

The rest was to come from solar rooftop, which has managed only 8.9 GW, or 22% of its target. This sub-segment added just 1.4 GW in 2020 and 2.2 GW in 2021.

It is clear that at current speed India will miss out on its targets.

Why the deficit holds significance?

The deficits matter in the context of India’s solar vision.

Solar is the key driver in India’s move towards green energy, and to cut its CO₂ emissions intensity to 33-35% of its 2005 levels, as per the Paris Agreement.

More solar would also help address the air pollution problem: India has 63 of the world’s 100 most polluted cities, according to IQAir.

Why India has struggled to achieve its solar targets?

One reason why India has struggled to achieve its solar targets is what Crisil Research terms an “unstable policy environment“. There is a growing incoherence between the policy thrust on renewable energy on the one hand and the actual action by implementation agencies like the Solar Corporation of India (SECI) and state distribution companies on the other.

Regional differences: About 35% of the installed capacity in solar rooftop is from just the top three states, and around 50% comes from the top five. Geographical advantages only partly explain the differences. For example:

– J&K and Andhra Pradesh are among the top five states in solar potential, according to the National Institute of Solar Energy (NISE). But none of them features in the top five by installed capacity in the commercial and industrial segments.

– Similarly, Tamil Nadu is among the top five by installed capacity, but has lower solar potential, as per the NISE ranking.

How has residential segment contributed to solar capacity?

In the last two years, the residential segment, and not the commercial and industrial segments, has driven new capacity in solar rooftop.

According to Bridge to India, the share of residential in new capacity increased from 11% in 2017 to 34% in 2021. There exists some barriers:

Net metering issue: It lets consumers use the solar power they generate and be billed only for the additional power they draw from the grid. In 2021, the Centre introduced guidelines to lower the rooftop threshold for net metering to 500 kW in 2021, and several states followed suit. This made solar rooftop less attractive, especially to large and medium industrial consumers.

A basic customs duty on imported solar cells and modules, which came into effect this month, also impacted the economics of solar projects whose implementation got delayed by the pandemic.

What is the global situation wrt solar power?

Demand for solar cells and modules is picking up globally.

Bloomberg New Energy Finance expects global solar capacity to increase from 183 GW in 2021 to 334 GW in 2030.

China has been leading the race in solar: from just 4 GW of solar rooftop capacity in 2016, it expanded to 27.3 GW in 2021, according to Rystad Energy, a research firm.

What is the way forward?

The key to India’s success in this domain will be in aligning its policies to intent, while building its manufacturing base.

Source: This post is based on the article “The rooftop eclipse on India’s solar ambitions” published in Livemint on 20th Apr 22.