Over the past few weeks, India’s minister for power, coal and renewables, Mr. Piyush Goyal has publicly stated on several occasions that he envisions India to have 100 GW of solar capacity by 2022. This is very ambitious. For this target to be achieved, India would soon have to start ramping up solar capacity at a pace similar to that of China, which plans to add another 40 GW in the next three years (avg. 13-14 GW per year) to reach its target of 70 GW by 2017. To put it into perspective: China’s current installed solar capacity is approximately ten times that of India and, per capita, China’s power consumption is around five times that of India.
- A drastic upward revision of India’s solar target makes sense.
- The speedy developments in the solar market have made the current 20 GW target by 2022 seem unambitious.
- 100 GW in the next 10 years will be a stretch, but can be achieved
Image source: businessinsider.com
In India, the 100 GW plan is still under deliberation, there is, as yet, no specific road map nor has it been made an official target. Already under the previous government, the Prime Minister’s Office (PMO), led by Dr. Manmohan Singh, had asked the Ministry for New and Renewable Energy (MNRE) to increase the target to 100 GW. However, at that time, the MNRE suggested that the 100 GW target should be set for a later date, perhaps, somewhere around 2027. Last year’s discussions didn’t really go anywhere and then the May elections brought in the new government.
In our views, a drastic upward revision of a solar target makes sense. Even the 20 GW target looked very ambitious for India when it was announced in 2009. Because the global and Indian solar market developed so rapidly, it now seems quite feasible. BRIDGE TO INDIA actually believes that achieving 100 GW by 2022 is possible. We have shown how it can be done in our recent publication, “Beehives or Elephants: How should India drive its solar transformation?”
Here are some reasons why the Indian solar story has picked up markedly: the new government has gone out of its way to revoke the anti-dumping duties (refer); a solar parks policy has been announced (refer), the central government portion of the NSM phase II has been ramped up from 3.6 to 15 GW (refer); the World Bank has committed to financing a 750 MW ultra-mega solar project (refer); the US-EXIM bank has signed an MoU with IREDA for USD 1 bn to finance solar equipment and services (refer); the German lender KfW is considering a EUR 1 bn loan to solar rooftop projects; the government is working on a comprehensive Renewable Energy Bill (refer), a rooftop solar policy and a revision of the Electricity Act 2003; the Prime Minister is taking a personal interest in making the renewable energy investor summit in February 2015 a success (refer).
100 GW is still a very ambitious target and a lot of structural changes would be required in the overall power sector in the country for this to work. If these structural changes can be made, BRIDGE TO INDIA recommends that the government set annual targets of 5 – 7 GW for the next couple of years. The targets can then be ramped up to 12-15 GW per year by structurally opening up the parity-driven, distributed solar market.