Analysis: India’s Solar Energy Progress


Solar energy is a clean, virtually inexhaustible source of energy. Over the past decade, increasing awareness of climate change, its consequences, and energy security considerations have forced the global community to focus on renewable energy sources, such as solar energy, resulting in unprecedented growth in solar energy applications. The Indian Solar Industry is growing at a record-breaking pace in the past few years and is all set to become the third-largest solar market globally only behind China and the USA. Going forward, the U.S. China, Japan, and India will dominate the global market, with an estimated 73 percent of global demand in 2017. Due to technological advancement, solar energy applications are becoming more economical, attracting global attention with the expanding scale of market penetration and production, and the rising cost of electricity generated from fossil fuels. Within a few years, unsubsidized solar power would cost no more to end-customers in many markets than electricity generated by fossil fuels or by renewable alternatives to solar energy.

Current Scenario

Fortunately, India lies between Tropic of Cancer and the Equator and has an annual temperature in the range of 25°C – 27.5 °C which makes India a hotspot for Solar Energy generation. According to a study, India can generate around 750GW of solar power by just using its 3% of wastelands. Taking all this into consideration, the Prime Minister of India, Narendra Modi announced a goal to increase solar power capacity to 100 gigawatts (GW) by 2022—five times higher than the previous target. The 2022 target is extremely ambitious (the world’s total installed solar power capacity was 303 GW in 2016) and would make India a global leader in renewable energy. Of the 100 GW target for solar, 40 GW is expected to be achieved through the deployment of decentralized rooftop projects, 40 GW through utility-scale solar plants, and 20 GW through ultra-mega solar parks.

In 2015, India added more than 2 GW solar capacity to reach a cumulative capacity of 5.6 GW by December. In addition, 35 new tenders with a cumulative capacity of 15.5 GW were announced. Currently, 25 GW of projects are in various stages of development, and 5 more GW of new tenders will be released within the next few months.

India is all set to reach its annual solar capacity addition target for this fiscal year. According to the targets, India will add 12 GW of new solar power capacity this fiscal year, and add 15 GW and 16 GW of new solar capacity in FY2018 and FY2019, respectively. This will also bring the country closer to the government’s commitment to providing 24-hour electricity to all Indians by 2019. The states of Telangana, Karnataka and Tamil Nadu will see the largest solar capacity additions this financial year (collectively contributing to more than a third of new capacity additions in FY2017-18). While a majority of these new projects will be “ground-based,” utility-scale grid-connected solar parks (with the government encouraging the use of wasteland for the development of these parks), 1 GW of new solar power capacity will be added to rooftops dotted across the country. India also plans to install 44 MW of solar PV on canal tops and banks, a novel concept that was first piloted in the state of Gujarat in 2012. Canal-top solar power projects have the dual advantage of little to no requirement of land to set up the solar panels, as well as limiting the evaporation of water from canals and reservoirs.

While the impetus has been provided by the center, almost every state in the country now has a renewable or solar energy policy. Incentives like GBI (Generation Based Incentive), AD (Accelerated Depreciation), Viability Gap Funding, capital subsidy, and feed-in-tariffs, both at the federal and state level have helped increase India’s total installed solar capacity by over 80 percent in the last 12 months to reach 8.1 GW. Initiatives for the development of 25 solar parks, Ultra Mega Solar Power Projects, canal top solar projects, and 100,000 solar pumps for farmers are at different stages of implementation.

India will need $250 billion in the next six years and $1 trillion by 2030 to provide 24/7 electricity to all its citizens. Around 293 global and domestic companies have committed to generating 266 GW of solar, wind, mini-hydel and biomass-based power in India over the next 5–10 years. The initiative would entail an investment of about US$ 310–350 billion. Moreover, the business case for investments in RE, particularly for large investors like The World Bank sees this solar impetus as an investment opportunity and is providing $1 billion to support India’s ambitious solar initiatives; The Ministry of New and Renewable Energy (MNRE) has signed an agreement with Germany-based KfW Development Bank to fund the Rs 300 crore (US$ 44.7 million) floating solar project which is expected to generate 310GW of green energy and many more are added to list.

As India’s renewable energy sector marches from the margins to the mainstream, numerous opportunities are becoming available to work in tandem with global counterparts. International cooperation in RE research is essential to expedite the identification and development of solutions to meet the ever-augmenting demand for affordable, non-polluting and renewable energy. To develop these cost-effective technological innovations, the need for active collaboration between industries and academic institutes, as well as research & technological partnerships between the developed and developing countries cannot be over-emphasized.


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