India’s solar capacity addition is set for a record in 2019.
New installations this calendar year will reach nearly 14 gigawatts (GW), which is about 50% more than the capacity added last year, according to a report by the Gurugram-based renewable energy consultancy firm Bridge to India, released on Jan. 09.
The new capacity addition will take India’s installed solar capacity to about 38 GW by the end of the year. Overall, the country is estimated to add nearly 16 GW of clean energy capacity in 2019, driven by large-scale solar projects.
Prime minister Narendra Modi’s government has set a target of building 100 GW of solar capacity by 2022 to help meet one of the country’s goals under the Paris climate agreement: renewable sources must account for up to 40% of power-generation capacity by 2030.
The central and state governments have been auctioning tenders to build large-scale solar projects, whose main customers will be state-owned power distribution companies. These projects take up to two years to get commissioned, which is when the new capacity is considered added, said Bridge to India analyst and the report’s lead author Arti Mishra Saran.
In 2018, addition of new capacity fell primarily due to low tender activity in the past couple of years, Saran said, adding that the projected rise in additions this year is a result of heavy tendering activity in late 2017 and early 2018.
After dipping in the second half of 2018, government tenders picked up again in December, when India’s ministry of new and renewable energy announced plans to issue tenders for 60 GW by March 2020.
Apart from such large-scale projects, installation of rooftop solar panels also continues to rise.
Indian households have not yet warmed to rooftop solar panels due to their high cost of purchase. But commercial and industrial buildings, which are supplied grid electricity at significantly higher rates than residential users, find it economical to switch over to solar panels.
As land becomes tougher to acquire, developers are now eyeing water bodies. “The latest tenders for floating solar have gone well and there has been a lot of excitement from developers,” Saran said, adding that new auctions for floating solar projects of up to 5 GW are expected from the government in 2019.
Winning bids for the government’s tenders this year will range from Rs3 and Rs2.5 per unit of electricity, the report said. Bids had fallen to Rs2.43 in 2017.
Power generated from coal generally sells at over Rs3 per unit in the country.