Since the new government took charge of power, India has witnessed never-seen-before interest in Solar Photovoltaic technology as a strong alternative for coal based power plants. Government has rolled out friendly policies to boost the solar PV installations in the country. One of the major decision was escalating target of Jawaharlal Nehru National Solar Mission from 20 GW to 100 GW by 2022.

     The decision has led to positive outcomes in recent times. As of 28th February, 2018, country has near about 17 GW of installed capacity from Solar energy. (Reference: Monthly report of all India installed capacity of power stations by Central Electricity Authority, Government of India). It was only 3.7 GW at the time of policy up-gradation (June 2015). However, as we move towards the 2022 target, newly emerged problems are choking the pace at which the solar plants are being installed.

india solar forecast by Mercom
India Solar Demand Forecast (Courtesy: Mercom India)

     A report published by Mercom, a highly respected research firm indicates decline in the solar installations in calendar year 2018. Thankfully the cumulative installation rate is not negative. It is expected to just slow down. Following are specific reasons;

  1. The Directorate General of Safeguards Customs (DGSC) and Central Excise recommended imposing 70% additional safeguard duty on imported solar cells and modules from China and Malaysia. This additional duty is imposed for 200 days starting from January 2018. However, Madras high court has temporarily placed stay on the decision.
  2. The pending issue of anti-dumping duty is matter of concern for the industry since last few months. The Directorate General of Anti-Dumping (DGAD) is expected to clarify the issue in second half of 2018.
  3. This one reason is interesting and quite funny. After June 2017, Indian ports suddenly started classifying solar modules under the category of ‘electric motors and generators’ instead of ‘diodes, transistors and similar semi-conductor devices’. The ‘electric motors and generators’ category attracts additional 7.5% import duty on modules. Ministry of New and Renewable Energy has already asked Finance ministry to resolve the issue as early as possible to minimize the business loss. According to media reports, Solar modules worth more than $150 million are stuck at various Indian ports.
  4. Many government bodies accelerated pending tender processes in last month of 2017. Hence, most of those plants will be commissioned not before early 2019.

     As mentioned earlier, the newly emerged issues along with the weak auction activity from various government bodies are the main cause behind this forecast. The trend will settle thereafter.

     Mercom has projected 70 GW of solar power generation in 2022 which does not fulfill the target. I think that it will cross the 80 GW. (No technical proof, this is hypothetical statement as of now!). Whatever the thing will be, India would have taken big leap in the solar market by 2022. May be the world leader in the solar domain!!

reference report link: click here