Powering Up the Solar Sector in India: An Outlook


Over time, solar power inverters have become smarter and offer features like never before

By Sudeshna Das

India has an ambitious goal of installing 100GW of solar energy capacity under the Jawaharlal Nehru National Solar Mission (JNNSM) by 2022, thereby redefining the earlier target of 20GW for the same period. The target will principally comprise 40GW of rooftop and 60GW of large- and medium-scale grid-connected solar power projects. On achieving this target, India would emerge as one of the largest green energy producers in the world, surpassing several developed countries.


Such an ambitious target calls for huge capital investments, to the tune of ₹ 6 trillion. In addition, solar power projects requiring investments of about ₹ 900 billion are planned to be bundled along with thermal power projects. Typical investors would include large public sector undertakings (PSUs) and independent power producers. State governments have also come out with state-specific solar policies to promote addition of solar capacity.

Solar growth drivers
As part of this ambitious goal, India’s total grid-connected solar capacity crossed 3GW in December 2014, though only a paltry 886MW was added during 2014. This resulted in another dismal year of less than 1GW installation. The Ministry of New and Renewable Energy (MNRE) announced that India crossed the 1GW mark in July 2012 and the second GW mark in August 2013. Policy and regulatory uncertainties ensured that it took an inordinately long time for the third GW mark to be crossed.

While the first half of 2014 was full of uncertainty and indecision due to the elections, action picked up in the second half, which facilitated the creation of a good foundation for a promising 2015. The MNRE started the process of allocating 3GW worth of solar projects under state-specific programmes.

Several central PSUs and government organisations are also in the process of setting up solar plants. Three southern states, namely, Karnataka, Andhra Pradesh and the newly-formed Telangana, have allotted 500MW of solar projects each and, if all goes well, a majority of these projects will be commissioned by the end of this year or early next year.
Apart from that, several projects that were started in 2014 will be completed this year. These projects include 750MW of solar projects allotted under phase 2, batch 1 of JNNSM, allotted under the state policies of Uttar Pradesh, Punjab and Madhya Pradesh. Overall, it is expected that around 2GW of solar capacity will be added in 2015.

On the way to Make in India
The 2GW growth prospect in 2015 along with the proposed five-fold increase in JNNSM targets will boost solar manufacturing industry in the country. This, in turn, will help in the creation of technology hubs for manufacturing, broadly in sync with Make in India initiative.
Apart from local players, global solar manufacturers also have an eye on India as one of their preferred destinations for solar energy investment. According to industry sources, there are a host of global renewable energy firms that have shown interest in investing here. India has made it clear that it will encourage global as well as local solar manufacturers under Make in India and are offering huge incentives to these firms to start production here. Recently, we have seen a flurry of global investors investing in states like Delhi, Tamil Nadu and Kerala, among others. The numbers are expected to increase substantially in the coming months.
However, numerous challenges need to be addressed for Make in India to become a reality for solar manufacturing. Off-grid solar power systems face major challenges like high capex-investment requirements, inefficient subsidy-disbursement processes and no minimum guarantee of return on investment (RoI). Moreover, it is not feasible to render any generic installation approach due to varying consumer locations and preferences. Therefore increasing solar capacity in the country requires planning and innovation to get rid of those challenges.

Bridging policy gaps
Multiple decentralised schemes are available from different ministries to facilitate solar electrification schemes. These schemes need to be integrated or linked to provide clear directives to the industry and users. A centralised system to disburse capital subsidies may further streamline the process.

Introduction of an audit system for monitoring the obligatory solar purchase by DISCOMs and heavy penalty for defaulters may ensure adherence to the fulfillment of solar purchase obligations.

It is hardly possible to achieve the ambitious target of 100GW by floating tenders. Therefore just like the wind-energy segment, Feed in Tariff mechanism could be useful in solar as well.
The decision to drop anti-dumping duty on the import of solar cells may be a big hindrance for domestic manufacturing.

Facilitating investments
Specific solar sector schemes need to be implemented for reducing the cost of finance and increasing RoI. Sectoral cap for lending in the power sector is also applicable for solar and other renewable energy sectors. Raising finance for solar systems is a challenge with a dearth of low-interest loans due to this sectoral cap. Removal of this cap for renewable energy sector will improve leverage for the renewable industry.

Benchmark prices offered under different government subsidy schemes or tenders for solar system installation are often considerably lower than the actual cost of project implementation. This leads to disinterest among industry players in government tenders. Public-private partnerships for government-owned solar projects involving local entrepreneurs as well as electricity supply companies can be an effective model to ensure industry participation. Various forms of incentives such as tax holidays and partial risk guarantee (from the state government) can be provided to encourage solar industry.

Moreover, solar plants requiring huge demand for land may turn out to be a challenge unless the draconian land acquisition laws in the country are streamlined. Effective planning of projects also requires site-specific pre-feasibility analysis and assessment of local household and agricultural demand in the area.

UntitledIncentivising polysilicon manufacturing
The growth of solar industry in India opens a huge market for polysilicon. In the absence of domestic capacity, India is heavily dependent on imports. Polysilicon manufacturing involves high initial investment and also needs a large volume to achieve RoI. Local manufacturing needs special incentives to compete with global manufacturers. These incentives may either be in the form of tax sops or policies that stipulate special preference for local vendors. This, in turn, will benefit the solar ecosystem in terms of productivity, foreign trade and employability, among others. Adani and SunEdision have announced an investment of about US$ 4 billion in Gujarat for a vertically-integrated polysilicon-refining facility.

Enabling efficient-energy storage
Availability and reliability are imperatives for any successful energy source. Energy storage systems (ESSes) and charging mechanisms play a critical role in ensuring reliability and efficiency of solar power sources in the country, especially during the season of low solar light and in the hinterlands of the country that are prone to frequent power blackouts. Moreover, an efficient ESS also helps to ensure reduction of maintenance cost by countering intermittency in off-grid systems.

In the last decade, lithium-ion based ESSes have helped promote implementation of off-grid solar energy facilities by ensuring a captive source for continuous power supply, therefore minimising dependency on fossil fuels or on-grid systems.

Innovative storage mechanisms (such as flow batteries instead of lead-acid and lithium-ion technologies) and hybridising solar plants with either wind, pumped hydro or biomass can make load balancing more robust.

Powered by smart inverters
Solar system inverters are in great demand following the government’s decision to boost solar power generation in the country. Over time, solar power inverters have become smarter and offer a number of features such as remote monitoring, which has increased their demand. Even micro-inverters have received significant importance in the global market. In terms of dimensions, compact inverters in central sizes that have lesser weight and lower losses are growing in popularity.

Solar system developers such as engineering, procurement and construction companies are looking for inverter manufacturers that offer the latest technology and robust designs, which will enable them to operate in different conditions.

The Indian power industry offers both grid-tied and off-grid inverters. Considering the unstable grids situations, off-grid solar inverters are more suitable as compared to grid-tied inverters. Grid-tied inverters have limited use in India currently, as these require solar as well as grid power.

There is a lot of scope for development in distributed generation of solar hybrid spaces as only a few companies are capable of manufacturing this. Considering the net metering system in India, inverters with both back-up facility and the ability to interact with the grid are expected to be in great demand.

The way forward
Overall, 2015 seems to be a promising year for the Indian solar sector. It could even be considered as the onset of a golden era for solar energy sector if all good intentions of the government turn to reality. However, lack of standardisation for off-grid systems makes designs and performance parameters difficult to achieve. The government needs to establish process guidelines and enforce stringent quality standards to ensure sustainability of off-grid systems.

Last, but not the least, sectorial skill development programmes need to be supported by both the government and industry to ensure availability of huge manpower to support enhanced production and installation of solar systems.Year-wise Roadmap to Achieve the Target of 100GW Solar Capacity by 2022

Unique opportunities 
Smart cities. The smart city initiative being undertaken by the government of India is likely to entail significant investments in installing renewable energy capacity.Railways. Indian Railways plans to leverage solar energy by installing solar power systems on roofs of 500 trains as a pilot project.
Delhi solar policy draft
Delhi government in its solar policy has suggested generation of 1000MW of solar power in the capital by the year 2020.
The draft also recommends doubling this to 2GW by 2025, which is one-fifth of the state’s peak power demand. It will help resolve the power crisis in the capital.

“Since power cuts are there in most parts of country and grid-tied solutions do not work during power cuts, there are considerable amount of investments going waste during each power cut. The efficient off-grid solutions which have additional feature of exporting to grid are preferred. Apart from this, due to serviceability and prices people prefer to go for Indian made products. Both these trends are suiting us a lot since we are one of the leaders in Indian solar off-grid solutions. I see a really big solar boom in 4-5 years time for both in-grid and off-grid segments.

Yogesh Dua, managing director, upsINVERTER.com

“More than 50 per cent of the cost for any off-grid solar installation is accounted for by ESSes. Technological innovations are required to develop cheaper and more efficient ESSes.

Devinder Kumar, chief executive officer, solar projects, Su-Kam

“The market for inverters for solar installation is quite upbeat following the government’s decision to boost solar power generation in the country. Policy action has been supported by corporate backing. With the technology being upgraded over time, solar power inverters have become smarter and offer a number of features that make these more efficient.

Anurag Garg, vice president, solar BU, Schneider Electric India

Leading Solar Players
  • Chemtrols Solar Pvt Ltd
  • Emmvee Group
  • HHV Solar Technologies Pvt Ltd
  • Indosolar Ltd
  • Jupiter Solar Power Ltd
  • Moser Baer Solar Group
  • Photon Energy Systems Ltd
  • Premier Solar Systems Pvt Ltd
  • Selco Solar Light Pvt Ltd
  • Surana Ventures Ltd
  • Swelect Energy Systems Ltd
  • Tata Power Solar Systems Ltd
  • Titan Energy Systems Ltd
  • Vikram Solar Pvt Ltd
  • Waaree Energies Ltd
  • Websol Energy System Ltd