Significant steps are being undertaken in India to establish a solid foundation for solar power, including re-vamping policies and infrastructure in the country.
With a population of more than 1.2 billion people, a widening supply and demand gap in the energy sector has led to widespread power outages, leaving as many as 75 million households—especially in rural areas—without power.
In response to issues caused by the overburdened grid network, officials are increasingly looking to alternative energy sources like solar power to solve the power shortage.
A recent article in the Economic Times accounted plans to establish the country’s largest ultra-mega solar power plant in Madhya Pradesh’s Rewa district, and similar initiatives are being undertaken across the country.
This new push towards renewable energy is driving a CAGR of 43.2 percent from 2013-2018 in the Solar Power Market in India.
Long Term Plans to Increase Solar Power Generation
In a country that receives almost 3,000 hours of sunshine each year, solar power does seem to be the answer to India’s energy woes. Those 3,000 hours translate into 5,000 trillion kWh of energy, and have huge potential to bridge the energy supply and demand gap.
Ambitious plans have been undertaken across the country and the Indian Government has outlined long-term plans to attain an installed solar power generation capacity of 20,000 MW by 2020, which would increase to 100,000 MW by 2030 and to 200,000 MW by 2050.
Regional Segmentation of Solar Power Market in India by State
TechNavio analysts have compiled a list of factors that are expected to drive widespread adoption of solar power generation technology in India over the next four years.
Huge Potential in the Indian Solar Power Industry
Surprisingly, given the average of 300 sunny days that the country experiences, solar power production facilities are not nearly as well established in India compared with other alternative energies like wind power. This is partly due to the high capital investment involved in the installation of PV cells or CSP systems. Recently though, several private and corporate firms have started showing interest in solar power generation and are adopting green and emission-free technologies.
Demand and Supply Gap
India has been suffering from a persistent energy shortage with the average demand and supply gap nearing 12 percent of the total power supply. Rising energy requirements are a major factor driving the growth of the solar power sector in India.
The Power Ministry forecasts that electricity consumption will increase to around 1,900 kWh by 2032.
In response, policy measures such as the Jawaharlal Nehru National Solar Mission (JNNSM), aimed at encouraging investment in the sector, are being developed to help develop the market for solar energy in India. Increasing public awareness of issues such as energy scarcity and environmental preservation will also fuel the demand for eco-friendly and green power, hinting at growth opportunities for solar power.
Government Support
The Indian Government has allocated a huge amount of money towards the JNNSM, a major initiative by the government under the National Action Plan on Climate Change (NAPCC) along with the establishment of a clean energy fund. The objective of these action plans and other policy changes is to lay the foundation for future investments in solar energy.
Part of the plan offers incentives to private solar companies by reducing customs charges on solar panels by 5 percent and exempting excise duty on PV panels. This is likely to reduce the cost of a rooftop solar panel installation by 15 to 20 percent.
Increase in Renewable Energy Consumption
The increasing cost of fossil fuels is putting pressure on everyone from government officials to those working in the manufacturing sector to find stable, alternative energy sources. Increasing awareness of the benefits of solar energy is driving demand for solar power plants in India as they can increase the level of solar energy output, and ensure a high rate of return for investors in solar projects.
