India will not be able to achieve its ambitious target of generating 100GW solar power by 2022, ratings agency Crisil said.
In a report, Crisil’s industry research arm said that India’s aim of generating 100GW solar power by 2022 is likely to be not possible. According to the Crisil, in the best-case scenario, the country will touch 78-80 GW, against the current capacity of 21.65 GW.
Crisil expects an additional 56-58GW of solar capacity addition between fiscals 2019 and 2023. While this is a vast improvement from the 20GW added during 2014-18, but it still falls short of the National Solar Mission target. A safeguard duty on solar modules from China and Malaysia, which took effect this month and will continue for two years, is expected to slow capacity addition.
1000GW By 2022 – A Viable Call?
Rahul Prithiani, director, Crisil Research in an interview with Mint stated that they are more confident that projects with the Solar Energy Corp. of India (SECI) will be executed faster; their projects are better able to deal with evacuation concerns (i.e. connection to the national grid).
Individual states have also set aggressive targets under their respective solar policies. While 7.3 GW is under construction, based on already allocated schemes, another 1.7 GW is expected to be tendered and allocated over fiscal 2019 based on upcoming tenders under various state policies as on July, the report shared exclusively with Mint said. Prithiani added that the state government projects are not as well-funded and they have less access to cheap financing.
A key area of concern is the rooftop solar segment. The solar mission’s target for the rooftop segment—using the rooftops of commercial and industrial units to generate their own power and depend less on the grid—is 40 GW by 2022. Crisil expects this figure to be not more than 8 GW by 2023, because the cost of power here is expected to be far higher than from the grid.
There are execution and counter-party risks to the rooftop segment, and that’s why a big shortfall is being expected according to Prithani. He further informed that unless the rooftop solar segment is supported with a firm battery market and the legal enforcement of contracts because developers run the risk of the host establishment not honouring a contract when tariffs change, the rooftop market will struggle.