- India added a record 10 Gigawatt (GW) of solar energy to its cumulative installed capacity in 2021. This has been the highest 12-month capacity addition, recording nearly a 200% year-on-year growth.
- India has now surpassed 50 GW of cumulative installed solar capacity, as on 28 February 2022.
- This is a milestone in India’s journey towards generating 500 GW from renewable energy by 2030, of which 300 GW is expected to come from solar power.
- India’s capacity additions rank the country fifth in solar power deployment, contributing nearly 6.5% to the global cumulative capacity of 709.68 GW.
State of India’s domestic solar module manufacturing capacity
- Domestic manufacturing capacities in the solar sector do not match up to the present potential demand for solar power in the country.
- According to Crisil’s report, as on March 31, 2021, India had 3 GW capacity for solar cell production and 8 GW for solar panel production capacity.
- However, backward integration in the solar value chain is absent as India has no capacity for manufacturing solar wafers and polysilicon.
- In 2021-22, India imported nearly $76.62 billion worth solar cells and modules from China alone, accounting for 78.6% of India’s total imports that year.
- Low manufacturing capacities, coupled with cheaper imports from China have rendered Indian products uncompetitive in the domestic market.
Why is India falling short in Roof-top Solar Installments
- The steep rise in large, ground-mounted solar energy is indicative of the strong push towards increasing the share of utility-scale solar projects across the country.
- RTS deployment stands at 6.48 GW in 2021, far short of the Union Government’s target of 40 GW of RTS by end 2022.
- The large-scale solar PV focus fails to exploit the many benefits of decentralized renewable energy (DRE) options, including reduction in transmission and distribution (T&D) losses.
- One of the primary benefits of solar PV technology is that it can be installed at the point of consumption, significantly reducing the need for large capital-intensive transmission infrastructure.
- India needs to deploy both large and smaller-scale solar PV, and particularly needs to expand RTS efforts.
- There is limited financing for residential consumers and Small and Medium Enterprises (SMEs) who want to install RTS.
- Increased awareness, and affordable finance for RTS projects could potentially ensure the spread of RTS across the scores of SMEs and homes around the country. Aggregating roof spaces could also help reduce overall costs of RTS installations and enable developing economies of scale.
What are the challenges to India’s solar power capacity addition?
- Despite significant growth in the installed solar capacity, the contribution of solar energy to the country’s power generation has not grown at the same pace.
- Eg: In 2019-20, for instance, solar power contributed only 3.6% (50 billion units) of India’s total power generation of 1390 BU.
- The major concern lies in, of the 50 GW installed solar capacity, an overwhelming 42 GW comes from ground-mounted solar photovoltaic (PV) systems, and only 6.48 GW comes from roof top solar (RTS); and 1.48 GW from off-grid solar PV.
- The utility-scale solar PV sector continues to face challenges like land costs, high T&D losses and other inefficiencies, and grid integration challenges.
- There have also been conflicts with local communities and biodiversity protection norms.
- While India has achieved record low tariffs for solar power generation in the utility-scale segment, this has not translated into cheaper power for end-consumers.
- India needs to embrace a circular economy model for solar systems which would allow solar PV waste to be recycled and reused in the solar PV supply chain by the end of 2030 as India will likely produce nearly 34,600 metric tonnes of solar PV waste.
- The International Renewable Energy Agency (IRENA) estimates that the global value of recoverable materials from solar PV waste could exceed $15 billion.In this scenario, India could look at developing appropriate guidelines around Extended Producer Responsibility (EPR), which means holding manufacturers accountable for the entire life cycle of solar PV products and creating standards for waste recycling.
- This could give domestic manufacturers a competitive edge and go a long way in addressing waste management and supply side constraints.
- In addition to an impressive domestic track record, through the International Solar Alliance (ISA) established by India and France at COP-21 in 2015, there is a global platform to bring countries together to facilitate collaboration on issues such as mobilizing investments, capacity building, program support and advocacy and analytics on solar energy.
- Technology sharing and finance could also become important aspects of ISA in the future, allowing for meaningful cooperation between countries in the solar energy sector.
International Solar Alliance
- International Solar Alliance (ISA) was launched in 2015 by Prime Minister Narendra Modi and former President of France Francois Hollande at the 21st session of the United Nations Climate Change Conference of the Parties (COP-21) in Paris, France.
- The Paris Declaration that established the ISA states that the countries share the collective ambition to undertake innovative and concerted efforts to reduce the cost of finance and technology for deployment of solar generation assets.
- ISA was conceived as a coalition of solar-resource-rich countries (which lie either completely or partly between the Tropic of Cancer and the Tropic of Capricorn) to address their special energy needs.
- With the amendment of its Framework Agreement in 2020, all member states of the United Nations are now eligible to join the ISA.
- At present, 101 countries are signatories to the ISA Framework Agreement, of which 80 countries have submitted the necessary instruments of ratification to become full members of the ISA.
- As guided by the Framework Agreement of the ISA, the interests and objectives of the ISA are as follows:
- To collectively address key common challenges to scale up solar energy applications in line with their needs;
- To mobilize investments of more than USD 1000 billion by 2030;
- To take coordinated action through programmes and activities launched on a voluntary basis, aimed at better harmonization, aggregation of demand, risk and resources, for promoting solar finance, solar technologies, innovation, R&D, capacity building etc.;
- Reduce the cost of finance to increase investments in solar energy in member countries by promoting innovative financial mechanisms and mobilizing finance from Institutions;
- Facilitate collaborative research and development (R&D) activities in solar energy technologies among member countries.
- Countries that do not fall between the Tropics can also join the ISA and enjoy all benefits as other members, with the exception of voting rights.
- The Permanent Secretariat of ISA will be located in India at Gurugram, the first time that an intergovernmental treaty-based alliance will have its headquarters in India. The Interim Secretariat of the ISA is located at the National Institute of Solar Energy (NISE), Gurugram.