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Welcoming an Exciting and Promising New Year

As we step into the new year there are enough reasons to celebrate. The total installed capacity which totaled 5 GW at the end of 2015 doubled and crossed the 10 GW mark in November 2016. Solar’s contribution to the Nation’s energy basket rose to a recognizable 1% and overtook the bio mass segment to become the second largest RE contributor, after wind. The rooftop segment which lagged behind the ground mounted power plant segment, gained momentum to clock a cumulative installation of 1 GW in October 2016.

Two major and significant projects were executed in the year that passed by: The World’s largest power plant in a single location of capacity 648 MW in Tamil Nadu state and the largest rooftop in a single roof in the world of capacity 11.5 MW in Punjab. The year also saw the tariffs falling further from those quoted in 2015. For the 750 MW Bhadla Project, the lowest quoted tariff was Rs. 4/Unit. In the auction held by Solar Energy for the 500 MW rooftop scheme, the lowest ever quote of Rs. 3/Unit was received, for projects to be executed in three small states.

The year also saw several agreements for significant infusion of funds signed up. The World Bank will extend Mio $ 625 loan to support the rooftop solar while the Asian Development Bank and BRICS Development Bank will extend Mio $500 and Mio $250 respectively. Germany’s KfW will support the government’s effort to strengthen the grid under the Green Corridor program to the extent of $1 bn.

There were good market developments. Indian Railways, Metro Railways and several Airports shifted to top gear and decided to ramp up their investments in solar projects. In October the Railway Minister announced the “Indian Railways  Solar Mission” to install 1,000 MW of PV by 2022. Significant capacity addition would come through rooftop installations in their buildings, stations, loco sheds, factories, residential complexes and also from the roof of railway coaches. Encouraged by the successful trial runs of solar operated coaches, Railways plan to launch a train with coaches fully powered by solar. Taking a leaf out of the Delhi Metro Rail’s solar initiatives, Chennai, Hyderabad, Bangalore and other metros are investing substantially on solar. Neyveli Lignite Corporation, one of the large coal mining companies and which also operates coal fired power stations is investing big to set up 750 MW of solar power.

Initiatives by the government owned institutions like the above, the accelerated roll out of Rooftop program and Solar Parks program by Solar Energy Corporation (SECI) and National Thermal Power Corporation (NTPC) provided strong growth in 2016.  

The year 2016 also saw the Opex model finding favor with several large private companies. They lent their large unused roof to the Renewable Energy Service Companies (RESCOs) and entered into long term power purchase agreements. The solar power prices were lower than those offered by the utilities and this meant large savings on energy.  

The market developments over the year has lead to a significantly large project pipeline and by end 2016 it stood at 14 GW.  

On the manpower development front, the Suryamitra program launched by the National Institute for Solar Energy (NISE) to provide employable skills in the solar PV segment picked up significant momentum. As many as 137 institutions across 26 states are now authorized to conduct the skill development program and more than 3,200 Suryamitras have been trained under this program. This effort would help meet the growing need for trained manpower particularly for jobs relating to Installation & Commissioning and Operation & Maintenance.   

There had also been some disconcerting portends in 2016 both for the developers and the manufacturers. With the sluggish growth in power demand, the DISCOMS seem to be not very enthusiastic about purchasing RE power. This can exacerbate the curtailment issues and can hit the bottom line for the developers. For the manufacturers, the recent WTO ruling against the domestic content requirement is unwelcome news. It can also hurt the Make in India effort. The year saw significant discussions on issues that will have a direct bearing on the sector’s growth like the Goods and Services Tax (GST), the curtailment of Accelerated Depreciation (AD) Benefits, Currency Exchange Rates and of late, the demonetization and interest rates.

As we step in 2017 and draw a year closer to 2022, we have far more to accomplish. There are exciting growth opportunities and also challenges that would demand bold and far sighted initiatives, innovation and more. With the government’s unwavering and deep commitment to promote solar, we can expect the project pipeline to continue to maintain strong growth and regulatory and policy measures brought in to solve the hurdles.

In 2017, we can expect another doubling of capacity addition from 10 GW to 20 GW and regulatory and policy measures brought in to smoothen the path to reach the 100 GW summit.

For sure, India will draw curtains on 2017, rubbing shoulders with the present leaders of the Solar World. India’s rise as a solar power would be greeted across the world and would attract greater interest and investment in several other countries.

We enter 2017 on a solid ground, with great excitement and optimism.

Intersolar India Wishes all Partners, Stellar Accomplishments, Business Successes and Greater Pride in contributing to India’s Solar Energy ambitions in 2017.