Projections for solar growth in India (ADD scenarios)

The Indian solar market is at a crucial juncture. Anti-dumping duties (ADD) will impact the market – severely if imposed, still substantially even if not (just by creating uncertainty). Projects under the National Solar Mission (NSM) will be affected least. Projects under state policies and parity-based projects might not only be delayed but fully called off. For more details, please download our latest India Solar Compass (July 2014 edition) here.

  • If ADD were not tabled in the first place, India would have added over 1.6 GW in next year
  • Even if ADD will be scrapped India would add only around 1 GW solar capacity in the next year
  • The NSM will be the main contributor to solar growth, irrespective of ADD

The Ministry of Commerce had recommended ADD for solar cells and modules in May 2014. Since then, the Indian solar market has held its breath. We are considering three scenarios for the market projection.

In the first scenario, we assume what would have been the case (hypothetically, as a base line), if ADD had not been recommended in the first place. In this case, we would have expected over 1.6 GW to be added in the next year. Various state policies would have contributed around 700 MW. Over 300 MW would have come from the NSM. Parity based projects would have contributed an additional 300 MW.

Figure 1: Projected quarterly PV installations in India (hypothetical, no ADD talk)

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In the second scenario, we presume that the announcement of recommendations is leading to delays but by August, a decision not to impose the duties will be announced. This is currently a likely scenario. India could then still reach almost 1 GW of new capacities in the next twelve months. State policies would add over 300 MW. Around 300 MW would be added under NSM. Parity based projects would contribute around 200 MW.

Figure 2: Projected quarterly PV installations in India, if ADD are scrapped

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Under the third scenario, we presume that ADD will be imposed. Projects in the installation stage will likely still get commissioned in Q3 of 2014. But after Q3 of 2014, the only significant capacity additions will be under NSM. The impact of ADD will be minimal for projects under the domestic content requirement (DCR) category. Under the open category for NSM, the orders have already been placed for modules and few projects will likely be commissioned in next year. The parity-driven market will come to a halt. In total India will only build around 550 MW. The overall effect of anti-dumping duties vis-à-vis the baseline scenario will be a minus of 1 GW or two-thirds.

Figure 3: Projected quarterly PV installations in India, if ADD are imposed

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Mudit Jain is a consultant at BRIDGE TO INDIA.

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