2014 turned out to be quite a happening year in the Indian solar market. The announcements, which came in plenty, will go a long way in gearing up the market for a stable and promising future.
The cumulative installations in India crossed the mark of 3000 MW a little over a month back. Mercom Capital has forecasted that another 1800 MW will be added during 2015 calendar year.
The year of 2014 was also the year of general elections in the country. As a result, major activities only started once the new government led by Prime Minister Modi stepped in. As we step into 2015, here’s a look back at the 5 biggest stories from the Indian solar market over last year.
India Decides Not To Impose Anti-Dumping Duties on Foreign Solar Modules
With its decision to not impose anti-dumping duties on imported solar photovoltaic modules, India avoided a major confrontation with the United States at the World Trade Organization (WTO).
Earlier, the Indian Ministry of Commerce had proposed to levy duties ranging from $0.11 to $0.81 per watt on modules imported from the US, China, Malaysia, and Taiwan. However, the proposal did not find favor from several other ministries. The minister for transportation and the minister for coal, power, and renewable energy were opposed to such a levy, as they felt it would significantly increase the cost of solar power production. Subsequently, the Indian Ministry of Finance rejected the proposal (actually, it simply chose to not act on it!).
First Solar Conjures Lowest Bid In The Andhra Solar Tender
When the Indian state of Andhra Pradesh invited bids for 500 MW of solar power back in August, First Solar emerged as the lowest bidder at 8.75 cents/kWh (levelised tariff = 10.28 cents/kWh). This was news because it was one of the lowest solar bids announced and did not factor in any government subsidy.
India Announces 100 GW Solar Power Capacity By 2022
While analysts were still busy studying the bidding results in Andhra, and pondering over the Ultra Mega Solar Power projects (which were eventually cleared by the Indian cabinet), several reports claimed that India had hiked its solar power capacity target by five times, in a bid to install 100 GW capacity by 2022.
To be clear, the 100 GW plan is still under deliberation and yet to be made an official target. MNRE was said to be chalking out a roadmap to achieve this magic number. Since this announcement, all GW level announcements coming in from India have been seen linked to this central theme. The ones which have been much in the news include — Indian Railways, Coal India Limited, and NTPC.
Domestic Manufacturing — Make In India & RE-INVEST
Not implementing the solar dumping duties was arguably the best policy decision taken this year. It ensured that the low domestic solar production in India will not put the brakes on its solar dreams. Nevertheless, ramping up the local manufacturing base of solar power is one of the stated objectives of India’s National Solar Mission.
In a bid to achieve this, the government introduced exclusive projects for the domestic manufacturers. An important multi-sector program under the name of “Make In India” was launched later this year. The program envisages the creation of a friendly investment climate to promote investments in 25 important sectors, including renewable energy. It has been reported that several manufacturing companies (here and here) are looking to tap opportunities in solar energy worth billions of dollars in India.
A major conference (Renewable Energy Global Investors Meet and Expo or RE-INVEST) has been scheduled for February 2015 to attract investments in the solar market. Sometime back the government cleared 1300 MW of capacity for domestic manufacturers.
India To Formulate A “Renewable Energy Act” To Attract More Capital
A National Renewable Energy Policy is in the making. It is expected to be ready and in place by February of this year, just before India organises its first RE-INVEST.
The proposed Renewable Energy Act will not only help in streamlining many aspects of renewable energy, like power generation, supply and tariff, grid usage, etc., but also help attract much-required capital investment.
The lack of a focused renewable energy policy has been a major barrier for flow of capital in this sector. The solar sector alone is said to require an investment of $40 billion a year, while it has been getting a mere $6 billion.
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