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  • Writer's pictureWattscore Energy

The country has set an ambitious target of installing 175 GW of renewable energy capacity by the year 2022, which includes 100 GW from solar, 60 GW from wind, 10 GW from bio-power and 5 GW from small hydro-power. 

Out of 100 GW solar capacity target, 40 GW is likely to be achieved by installation of rooftop solar projects. Rooftop solar is the fastest growing renewable energy sub-sector in India but installations must rapidly accelerate if the nation is to meet its ambitious renewable energy target by 2022. India has installed 28 GW of solar capacity, a four-fold increase in less than three years. Despite this strong growth, India has achieved only 10 per cent of its 40 GW rooftop solar target. This is well below the run-rate anticipated by government. To achieve the 2022 target, India will have to greatly accelerate the pace of new solar rooftop installations.

Some 70% of the market growth has been driven by commercial and industrial (C&I) consumers, clearly incentivised by the very high tariffs applying to these two sectors. (India has a very heavy cross-subsidy from C&I to residential and agricultural users, which in turn acts as a key incentive making self-generation for C&I immediately cost effective.) The balance of 30% is split equally between government and residential consumers. The top five states account for 54% of total rooftop solar capacity in India according to Bridge to India. 2 Maharashtra has the highest installed capacity of rooftop solar (473 MW) followed by Tamil Nadu (312 MW), Karnataka (273 MW), Rajasthan (270 MW) and Uttar Pradesh (223 MW). The increased adoption of rooftop solar in Indian states can be attributed to high retail tariffs for C&I consumers, favourable net metering policies, corporate social responsibility programs and increased consumer awareness.

Despite strong growth, India has to-date achieved only 10% of its target capacity addition of 40 GW by financial year (FY) 2022. To achieve the 2022 target, India will have to accelerate the pace of new solar rooftop installations, while the rooftop solar photovoltaic (PV) segments including C&I, government and residential must be mobilised and encouraged for large scale adoption.

To assist the Government of India achieve its ambitious 2022 target, the World Bank is providing US$625m in financial support for a grid connected rooftop solar project. The project supports the shift to renewable energy by financing the installation of at least 400 MW of grid connected rooftop solar photovoltaic (GCRSPV) units across India, providing discounted, long tenor finance to both the suppliers of solar PV units as well as consumers wishing to install them. The World Bank is implementing the scheme with the State Bank of India (SBI) and up to 31 December 2018, it included approved credit of around US$123m to support more than 235 MW of rooftop solar capacity to be added to the grid. The World Bank and SBI are further accelerating the process by developing new credit instruments. 3 Further international financial assistance includes concessional loans of around US$750m from the Asian Development Bank (ADB) and the New Development Bank (NDB). These have been made available to the SBI, the Punjab National Bank (PNB) and the Canara Bank for rooftop solar projects. 4 The German state development bank KfW is also extending €200m in financial support for rural solar deployments,5 and is considering a US$1.1bn loan support program for rooftop solar in India.

The rooftop solar market holds huge growth potential across India and should be exploited to help meet the growing energy requirements of the population. Rooftop solar PV can meet the electricity needs of consumers, and given the government’s push for induction cooking, it can also enable people to switch from imported kerosene or biomass to clean, sustainable domestic cooking solutions. With declining PV module and storage costs, rooftop solar can provide a quality and reliable electricity supply in a cost-effective way.

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India is an agriculture-based country. The agricultural sector provides a livelihood to over 50% of India’s population. In fact, the sector contributes 18% to the country’s GDP. However, the agricultural sector needs proper irrigation facilities and other amenities to reap proper benefits. The major constraint in this sector is farmers’ dependency on pumps for irrigation. Most of the farmers use pumps some of which are connected to the grid while some pumps run on diesel and other fossil fuels. According to a study conducted by KPMG, this sector consumes almost 20% of the installed power in India.

Another issue in this sector is related to the plight of farmers. Since some of the crops are seasonal, most of the farmers are deprived of regular source of income. Furthermore, farmers are not being able to earn anything from their dry/uncultivated land. Solar energy can be put to good use to address these critical issues of the agriculture sector.

Solar energy is one of the most vital renewable sources of energy that can be utilized for various purposes. Solar energy is widely being adopted in residential, commercial and industrial sectors and it has huge potential to benefit the agriculture sector. So, with an endeavour to offer financial and water security to farmers, the Indian government has launched various schemes to promote the installation of grid-connected solar power plants and solar pumps.

The scheme is divided into three different components – installation of standalone solar pumps, solarisation of grid-connected pumps and commissioning of grid-connected solar power plants. Through this scheme, the government targets to add 25,750 MW of combined solar capacities (all three components) by the year 2022.

Components of the new scheme The scheme has a total of three main components:

Component A – 10,000 MW of Decentralized Ground-Mounted Grid-Connected Renewable Power Plants of 500 kW to 2 MW individual plant size to be commissioned by 2022.

Component B – 17.50 lakh standalone solar powered pumps with capacity up to 7.5 HP to replace diesel-powered agricultural pumps.

Component C – 10 lakh grid-connected agricultural pumps with up to 7.5 HP individual pump capacity to be solarised by 2022.

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  • Writer's pictureWattscore Energy

India’s estimated cumulative installed solar capacity reached 30 GW at the end of the first quarter of 2019. However, rooftop installations still only make up 12 per cent of total solar installations which is some thing around 3.5 GW and the country could achieve only 9 per cent of its targeted rooftop capacity addition of 40 GW by 2022 if there would not be aggressive push to the installations.

Despite the hype and incentives, solar installations in the country are slowing down. Though the first quarter of 2019 saw a 4 per cent jump in installations to 1,737 megawatt (MW) but when compared to the 1,638 MW installed in Q4 2018, it was down 49 per cent compared to 3,377 MW added in the first quarter of 2018.

Source:-Business Today (Mercom Report)

Investments in the sector were over $2.8 billion in the first quarter, though 12 per cent lower compared to investments made in the first quarter of 2018. The report notes that while 85 per cent of the installations were large scale, only 15 per cent accounted for rooftop solar. Rooftop installations fell by 33 per cent year-on-year with capacity additions of over 260 MW in the first quarter of 2019, compared to 390 MW in Q1 2018.

According to the Institute of Energy Economics and Financial Analysis (IEEFA), 75 GW of renewable capacity has been installed across India, 28 GW has been auctioned and 37 GW of capacity is under various stages of tendering and bidding with a view to come on stream in the next couple of years.

While elections and inability to get clearance for many projects was an issue, there were many other problems the sector was going through. Availability of credit has been a brewing issue and has impacted the growth momentum of renewable energy in the last six months. Easy availability of credit and reducing the cost of capital will result in speedy implementation of projects and also reduce the cost of construction

In the last five quarters, government agencies such as the Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA), the Grid Corporation of Odisha (GRIDCO), Gujarat Urja Vikas Nigam Limited, and others have cancelled nearly 5 GW of solar auctions, citing the final tariffs were either too high or there was a wide gap between the highest bidder and the rest. Only part of this capacity was re-tendered. Other main factors that affected the capacity addition were land and transmission constraints, a 25 per cent safeguard duty on imports from China and Malaysia and issues in the tender schemes and tax uncertainties.

Despite this, India’s capacity addition is one of the fastest in the world. The global energy demand increased an estimated 2.3 per cent in 2018, and of this, India, China and the United States accounted for almost 70 per cent of this addition, says a REN21 (Renewable Energy Policy Report for the 21st century) report. India ranked fourth globally for non-hydro renewable capacity and overtook Italy to reach fifth in the global rankings for cumulative solar PV capacity.

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