BRIDGE TO INDIA has released results of the fourth RE CEO survey. The survey received responses from 41 industry leaders covering full spectrum of companies across the value chain and geographies. The two main findings of the survey, relating to business sentiment and expected capacity addition in the next 5 years, are instructive and cheering at the same time.

The industry mood is upbeat and optimistic. 73% of the participants are optimistic or very optimistic, marginally up over last year. The ratio of ‘very optimistic’ responses is actually up significantly over last year (34% vs 18%). This comes as somewhat of a surprise given all the operational and financial problems faced by the industry over the last 2 years. But growth can ease many struggles and it seems that surge in tender activity may be giving industry enough cause for optimism. It is worth noting that we have 18.6 GW and 11.0 GW of utility scale solar and wind capacity in the pipeline – projects allocated after successful auctions and under various stages of development.

Figure: RE business sentiment 

Source: India RE CEO Survey 2019, BRIDGE TO INDIA

The other most interesting finding from the survey is an estimate of 80 GW for total RE capacity addition in the next 5 years, split between solar and wind power as 59:21. The estimate of 16 GW of average annual capacity addition is far short of the government targets but tallies broadly with our assessment. Our only disagreement is with regards to prospects for rooftop solar. We believe that share of rooftop solar will be much higher at 15 GW rather than the 8 GW as suggested by the survey.

Figure: RE capacity addition estimate for next 5 years

Source: India RE CEO Survey 2019, BRIDGE TO INDIA

Since yesterday, we have been receiving results of exit polls pointing to a comfortable majority for BJP led alliance at the centre. That should further add to positivity in the sector as 78% of the industry rates 5 years of Modi government as ‘Good’ or better (share of ‘Poor’ is only 5%).

Irrespective of who forms the next government, there is no time to waste. Tough decision making and comprehensive reform of the power sector are needed to lay foundation for long-term growth. Recent MNRE brainstorming meeting with top industry leaders is a good start.

For all other insights from the CEO survey, please download full report from our website.