The financial challenge of India’s solar push

By Siddharth Singh, 12th February, 2015

The Council on Energy, Environment and Water (CEEW) published a policy brief recently that looked at key issues that could prove to be hurdles in the implementation of Government of India’s goal of 100 GW of solar power generation by 2022. This goal was increased by the new government, from the 20 GW by 2022 that was set by the previous government. Currently, solar constitutes approximately 3 GW of the power generation mix. It reveals that:

“A cumulative installed capacity (CIC) of 100 GW of solar power by 2021–22 would help scale up India’s solar capacity to 9% of total power demand. However, meeting such an ambitious goal would also mean a high compounded annual growth rate (CAGR) in solar capacity addition of 62.2% between now and 2021–22. Such a rate of growth is much higher than the 34% CAGR needed to achieve the earlier NSM goal of 20 GW.”

It adds,

“…irrespective of the route followed, India requires an investment to the order of INR 860,000 crore to INR 960,000 crore (~USD 140–160 billion) to achieve the target of 100 GW.”

And,

“…in the absence of expansion of domestic manufacturing capacity, solar imports worth INR 431,717 crore (USD 72 billion) would be needed to install 100 GW by 2021–22.”

The challenge, therefore, is of Gangetic proportions. However, the government claims solar sources will reach grid parity in this time period, which will accelerate solar adoption.

To read the entire policy brief, please click here.