Mercom Capital Group, a
global clean energy communications and consulting firm, released its quarterly update
on the Indian solar market.
installations in India crossed the 3 GW mark with 734 MW installed so far this
year. However, 2014 will be a disappointment with calendar year installations
forecasted at about 800 MW, a 20 percent drop year-over-year. Land acquisition
delays due to elections and uncertainty caused by the anti-dumping case
contributed to a slowdown in installations. Mercom is forecasting 2015
installations to more than double in 2015, reaching approximately 1,800 MW.
“The Indian solar industry
is visibly upbeat since the elections and especially after getting past the
anti-dumping case,” commented Raj Prabhu, CEO and Co-Founder of Mercom Capital
Group. “Recent cancellations of coal
mining licenses by the Supreme Court amid rising coal imports and increasing costs,
and continuing power shortages have all contributed to the positive momentum in
the solar sector,” stated Raj.
The Ministry of New and
Renewable Energy (MNRE) released a new installation goal of 15 GW by 2019 via
solar parks (a large area and infrastructure set aside by states to accommodate
installations of 500-1,000 MW) to be set up by states in three tranches. A revised
draft for Phase II, Batch 2, Tranche I Jawaharlal Nehru National Solar Mission
(JNNSM) projects was released with a target of 3,000 MW.
There have been other
announcements in a short period of time; a new program aimed at ‘ultra mega
solar projects’ with a goal of installing 20 GW by establishing solar parks was
announced recently. MNRE has also asked Public Sector Units (PSUs) to set up
large solar projects to meet RPO obligations. At the request of the Prime
Minister’s office, MNRE is also working on a plan to increase JNNSM
installation goal to a staggering 100 GW
By focusing exclusively on
large-scale and mega solar projects, India is going in the opposite direction
compared to other markets. In most major solar markets, with drop in costs, the
market has shifted from large-scale projects to residential and commercial
rooftop projects - closer to the end-user. With transmission and distribution
losses estimated at about 25 percent, and considering the country is severely
challenged when it comes to land availability and grid infrastructure this may
not be a sound long-term strategy.
Since the inception of JNNSM
in 2010, there has never been a shortage of big goals and announcements. Two
primary challenges have been execution and uncertainty, due to the lack of
long-term market visibility. A renewed government focus to address these
challenges would give confidence to the markets, and help attract sorely needed
foreign investments. That said, prospects for the Indian solar sector have
never looked better and the Modi administration’s strong commitment towards
solar has percolated to states, evidenced by the sense of urgency and
seriousness being shown by state administrations towards solar, the likes of
which we have not seen in the last five years.
Mercom Capital Group
Mercom Capital Group, llc,
is a global communications and consulting firm focused exclusively on clean
energy and financial communications. Mercom’s consulting division advises
cleantech companies on new market entry, custom market intelligence and overall
strategic decision making. Mercom’s consulting division also delivers highly
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