Realizable solar potential in India is 110 GW to 144 GW by 2024

Today, the contribution of solar to India’s power generation is less than 0.5%. This needs to grow significantly to help meet India’s growing power requirements. A recent BRIDGE TO INDIA analysis suggests that India’s realizable solar potential is 110 GW to 144 GW by 2024. For further details, please refer to ‘India Solar Decision Brief’ titled- “India’s Solar Transformation: Beehives vs Elephants” (online downloadable version available here).

The realizable potential in India is 110 GW to 144 GW by 2024
Solar could contribute 10%-13% to India’s grid power supply by 2024 without destabilizing the grid
26-35 GW is the potential for small rooftops (“bees”), 31-41 GW for commercial rooftops (“pigeons”), 32-42 GW for utility scale plants (“horses”) and 21-27 GW for GW-scale plants (“elephants”)

India’s power requirement has been growing at a CAGR of 5.2% for past seven years. [1] Applying the past growth rate to the future, BRIDGE TO INDIA estimates the power requirement in India in 2024 at 1,748 TWh. In Germany, solar and wind contributed 17% of total generation in 2013[2]. Considering continuous improvements in grid management in India, we estimate that solar could contribute to the tune of 10%-13% of total power generation by 2024, without destabilizing the grid. Based on this measure, the realizable solar potential in India as being in the range of 110 GW to 144 GW by 2024.[3] (For a detailed analysis of the ability of India’s grid to incorporate solar power, see the report [Grid Integration of distributed solar PV in India: A review of technical aspects, best practices and the way forward].)

We can also look at the grid-ceiling factor from the point of view of capacity rather than generation. What matters is the installed peak generation capacity of infirm power sources like solar as that will determine the scope of variation in the grid. As of 2012, in California wind and solar contributed more than 30% of the total installed capacity.[4] In Germany, wind and solar constituted 45% of total installed capacity in 2013.[5]The IEA, in a recent study[6], assumes that 30% grid penetration of solar (on a capacity basis) is technically possible with only minor adjustments and few additional infrastructure costs. India’s installed capacity in 2013 was 230 GW. As per IEA’s predictions, India’s installed capacity will grow at a CAGR of 6.4%.[7] By this measure, it will reach 455 GW by 2024. If Indian can accommodate 25% to 30% of solar in terms of installed capacity by 2024, then we arrive at a figure of 113-137 GW – so the range is the about the same.

For our estimation of the realizable potential, we took to generation rather than the capacity data, because otherwise we would have to make a number of assumptions on the composition of India’s power mix in 2014 (and the related CUF). I.e., the IEA projection for installed capacity is based on power mix assumptions (and a related average CUF of India’s power plants to meet the power requirements). If we assume a significantly higher share of solar with a lower than average CUF, the total installed capacity would have to be much higher to meet the same power demand.

This realizable potential has been split into four distinct grid-connected solar plant types (non grid connected solar has not been considered here and is not limited by any grid ceiling factor). We have considered five exclusive parameters for understanding how much solar capacity each type of plant could provide until 2024. A rating has been given to each factor on a scale of 10. A rating of 10 implies that the parameter is most favorable for that particular scenario.

Table 1: Expected share of realizable potential by 2024 for each scenario

Parameter	Small rooftop	Large rooftop	Utility scale	Ultra-mega scale
Timeframe of parity	1	8	6	5
Execution challenges (individual system/plant level)	10	7	6	2
Ease of policy implementation	3	5	10	7
Ease of raising debt financing	5	8	9	8
Transmission and grid stability constraints	10	6	4	1
Total rating points	29	34	35	23
Market share	24.0%	28.1%	28.9%	19.0%

We weighted every factor equally (1/5^th). The numbers and the weightage can, of course, be debated. So far, only the utility scale projects are a proven business model in India with some level of predictability. The other three are still being developed. We are only too aware of the difficulties of making predictions in solar in India. However, the main point is that the four segments are roughly equal in potential and importance and that building 25 GW of each in ten years is quite feasible.

We estimate the realizable potential at 26-35 GW, 31-41 GW, 32-42 GW and 21-27 GW for small rooftop systems, large rooftop systems, utility scale projects and ultra-mega scale projects, respectively.