This policy brief presents a roadmap for achieving India's ambitious target of 100 GW of cumulative installed capacity from solar.
Some of the challenges addressed in this brief include return on investment, land acquisition, evacuation infrastructure, availability of finance, and ease of doing business.
India's average solar irradiance at approximately 5.1 kWh/m2 is one of the highest irradiation received by any country in the world. As a result, the theoretical potential of annual power generation from solar is about 5000 trillion kWh, which is equivalent to the cumulative solar capacity of 600,000 GW. Whilst this large potential assessment is entirely theoretical, the opportunity that solar energy offers is undisputed. In order to draw on the potential of solar power, the Government of India launched the National Solar Mission (NSM) in 2010, with the aim of installing a cumulative solar capacity of 20 GW by 2021-22. Could India aspire to a higher ambition, making solar a critical part of its energy mix?
Until July 2014, India had installed 2.75 GW of solar capacity. Much of this capacity was installed on the back of declining panel prices, high share of overseas funding and proactive solar policies by some states. However even as many of these favourable factors are on the decline, or at best stalling, such as the plateauing of solar prices and the downward trend in overseas financing, there is still a huge opportunity for solar power as the price of coal (particularly imported coal) continues to soar and the constraints to expanding conventional power capacity become more acute.
Power from solar energy contributed only 0.41% of overall power demand in India in 2013-14. However, given the large untapped potential of solar energy in India and the opportunities ahead, the right set of policy incentives and a supportive ecosystem could increase solar's share significantly.
A cumulative installed capacity (CIC) of 100 GW of solar power by 2021-22 would help scale up India's solar capacity to 9% of total power demand. However, meeting such an ambitious goal would also mean a high compounded annual growth rate (CAGR) in solar capacity addition of 62.2% between now and 2021-22.
Such a rate of growth is much higher than the 34% CAGR needed to achieve the earlier NSM goal of 20 GW. While the more ambitious goal is feasible, it would test the resolve of policymakers, project developers, engineering contractors, financiers, manufacturers and other stakeholders.
Read: Tapping Every Ray of the Sun: A Roadmap for a Significant Role of Solar in India