India seems to have overcome the rough patches its solar sector went through over the past years. With a variety of new projects and developments in sight, the future of the solar market in India is in fact one of the rosiest.
Energy is a difficult matter in India. While the country is keen on reducing its carbon footprint, a variety of obstacles (such as a strict net metering policy – we have reported on this in November 2016) have previously hindered the desired solar growth. Now, however, a long list of new projects and promising developments lead experts to believe that India’s solar market will grow by as much as 90% in 2017.
8.8 GW of new solar power planned
Experts believe about 7.7 GW of new solar projects and 1.1 GW of rooftop capacities will be commissioned throughout the year of 2017, which will make the Indian solar sector grow by a remarkable 8.8 GW – and 90% over 2016. By the end of the year, India will most probably have a total of 18 GW of solar capacity.
As a result, the solar market in India will be the third-largest global market after China and the United States. However, demand in these leading countries is expected to drop, which will further strengthen India’s role on the global market.
Expected price fall will even out feared negative developments
As variety of factors have previously caused some concern: some experts were apprehensive of a weak demand growth, while others worried that demonetization might hinder the demand altogether. However, Bridge to India believes that “continuing reduction in module prices and downward trend in domestic interest rates will provide strong ongoing demand impetus to the market“.
Solar tariffs are estimated to decrease until below the critical INR 4.00 (USD 0.06)/ kWh mark. This would make solar power the most affordable renewable energy in India. Meanwhile, the inancial situation of power distribution companies will improve due to the UDAY implementation (a government scheme which aims to help envision the Indian Prime Minister’s idea of providing electricity to every citizen at all times). This will strengthen the renewable energy demand even further. “We expect sustainable demand of 6-8 GW for utility scale solar in the coming years,“ or so Bridge to India says.
2017 will also bring obstacles for the solar market in India
Nonetheless, while 2017 will be a successful ride for India’s renewable sector, it will also be a bumpy one. The Goods and Services Tax (GST) will be implemented this year and will bring rising costs. Though some believe that this may fuel uncertainty for developers and contractors, most experts think that any negative impact will be passed through to the distribution companies.
In any case, this new year will be full of remarkable developments for the solar market in India and will probably mark the beginning of a stunning story of success.
Title image: iakov-filimonov/shutterstock