New research published by Deutsche Bank has had to adjust the company’s forecast for India’s solar PV market up 240%, expecting 34 GW by 2020.
This is up from the analysts’ previous forecast of 14 GW by 2020, thanks in part to an influx of approximately $35 billion from global investors into the Indian solar PV sector. India itself has increased its solar energy target to attempt 100 GW by 2022, which has subsequently pushed its Renewable Energy Target up to 175 GW.
In fact, capital expenditure on solar could well surpass coal by the financial year-2019, and solar PV capacity could overtake coal in financial year-2020. Such forecasts are thanks to the current commissioning of 4.5 GW, and a strong pipeline of approximately 5.1 GW under construction and 15 GW worth of new projects. New investment and fund-raising opportunities such as yieldcos and green bonds are allowing India’s private sector to shift its focus from coal to solar.
Deutsche Bank extended its forecast for renewable energy to possibly account for 20% of India’s power capacity by 2020.
India’s renewable energy targets aren’t simply set to remain on paper, either, with Deutsche Bank noting that “solar has to be an inherent part of their expansion strategy, as [Renewable Energy] obligations become strictly enforceable and cost of coal power increases.
However, Deutsche Bank sees “challenges to higher penetration” past the country’s 20% capacity target. Transmission constraints and the integration of diurnal power into the grid are risks, and without peak-load management capability troubles could arise. Furthermore, Deutsche Bank notes the similarities between the generation of too much wind in Tamil Nadu with the possibility in Rajasthan, with its policy target of 25 GW worth of solar compared to its peak demand of only 11 GW.
A further risk, as noted by Deutsche Bank, is the enforcement of Renewable Energy purchase obligations, given the weak finances of state distribution costs. Other issues facing India’s greater solar PV penetration include financing, land acquisition, limited domestic manufacturing — a problem which is slowly being addressed as big-name solar manufacturers make moves to increase their presence in the increasingly popular market — and the returns and reliability of baseline data.
Appreciate CleanTechnica’s originality? Consider becoming a CleanTechnica Member, Supporter, Technician, or Ambassador — or a patron on Patreon.