Things have come a long way for solar in India in 2014

23 December 2014 |

As 2014 draws to a close, it is useful to look back and summarize how the Indian solar market as shaped up over the past one year. The mood of the Indian solar market in 2014 can broadly be divided into two distinct halves; pre 22nd August and post 22nd August. No, 22nd August was not the day when the new Modi government was sworn in. It was the day when the new government decided not to act on the anti-dumping duty (ADD) recommendations of the previous government. It was on this day that the new government acted decisively to show its commitment and vision for the solar sector in India (read here).

  • Prior to 22nd August, except for some cell manufacturers, it was mostly gloom and doom in the Indian solar industry
  • The new government forcefully rejecting ADD and drawing up an enhanced plan for 100 GW by 2022
  • A concrete proof of the changing times is the interest being shown by international module manufacturers and project developers in India

Prior to 22nd August, except for some cell manufacturers, it was mostly gloom and doom in the Indian solar industry. The previous government had recommended imposition of very high levels of ADD on imports of cells and modules (refer) affecting the economic viability of ongoing projects. States were struggling to keep their policy programmes on track and the developers were just standing still, waiting for more clarity (refer). The market had ground to a halt in the middle of the year. Due to this, 2014 is still expected to be the slowest year since 2011 for new project capacity addition with only 775 MW expected to be commissioned.

However, the narrative completely changed with the new government forcefully rejecting ADD and drawing up an enhanced plan for 100 GW by 2022 (refer). Electricity Act 2003 is being amended to increase the share of renewables (refer) and a new Renewable Energy Act 2015 is in the pipeline (refer). Commitments for credit lines adding up to USD 6 billion are being sought from multilateral agencies such as US-EXIM, KfW, ADB and World Bank (refer). These may all be just announcements but even on ground there has been material progress – funds have been allocated for 22 GW solar parks policy and public sector companies have been provided viability gap funding approval for their first 1 GW project (refer). Karnataka, Andhra Pradesh and Telangana have successfully completed allocation of 1,500 MW projects. In total, over 4 GW of projects are in a post-PPA development stage, an allocation or 3 GW capacity is planned for early next year and a 750 MW project in Madhya Pradesh is being developed with debt from World Bank. In times when many government programs are struggling to get funds, for the solar sector, even canal-top solar has received funding support.

A concrete proof of the changing times is the interest being shown by international module manufacturers and project developers in India. As predicted by BRIDGE TO INDIA, the ‘Make in India’ will succeed by reforming and growing the market and not by implementing protectionist barriers such as ADD.

The year 2015 promises to be much more exciting and we expect more favourable policy and funding announcements as part of the budget in February 2015. Happy new year to all our readers!


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