At the end of March 2018, India had a cumulative PV capacity of 21.6 GW according to the Ministry of New and Renewable Energy. Going forward, CRISIL expects the country to fall short of its 100 GW target due the uncertainty created by safeguard duties; instead it estimates only 78 to 80 GW of capacity by FY 202.3
- CRISIL says India will install a maximum of 78 to 80 GW by fiscal year 2023, thus falling short of the 100 GW goal by 2022
- Imposition of 25% safeguard duty will slow down capacity addition for the country, it believes
- State solar power projects stand the highest risk because of their inability to access cheap financing and lack of funding
- Rooftop solar is another segment that definitely is not anywhere near achieving the 40 GW target
- Instead of cancelling auctioned capacity, government should accept the bids received lest it wants to further delay the solar program
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Analytics and research agency CRISIL Limited, a division of S&P Global, has said India will not be able to achieve 100 GW solar power capacity target by 2022. According to its analysis, the best-case scenario shows 78 GW to 80 GW installed by fiscal year 2023.
Speaking to Indian business daily Mint, CRISIL Research’s Director Rahul Prithiani blamed this failure on the government’s decision to impose a 25% safeguard duty on imported solar cells from China and Malaysia.
The safeguard duty drama continues to create uncertainty in the Indian solar sector. After the Government imposed the duties despite Orissa High Court stay on its implementation, now the court has asked it to refrain from implementation till the next hearing scheduled for August 14, 2018 (see Court Pauses India’s Safeguard Duty). Now, Mercom India Research reported the Ministry of Finance has announced the government will not insist on paying of this duty as of now.
Between 2014 to 2018, there was 20 GW of PV additions in India. Going forward, in the years between 2019 and 2023, another 56 GW to 58 GW will be added, forecasts CRISIL, especially projects that developed under the aegis of Solar Energy Corporation of India (SECI).
Under state policies, 7.3 GW of capacity is under construction, with another 1.7 GW expected to be tendered and awarded during fiscal year 2019. Lack of funding and access to cheap financing for these state level projects is going to hamper their smooth development.
Talking about the spate of auctions that have been cancelled in the country by both state and central agencies owing to higher tariffs, CRISIL says the government ought to honour the tariffs accepted already if it doesn’t want to further delay the National Solar Mission (NSM) (see SECI Cancels 3 GW Auction, Partially).
India’s rooftop solar power capacity target of 40 GW by 2022 is unachievable, says CRISIL. It bets on additions of ‘not more than 8 GW’ by 2023 for this segment. This segment would need a firm battery market and legal enforcement of contracts to help developers to speed up installations.
In January 2018, CRISIL had warned 3 GW of PV and over INR 120 billion ($1.88 billion) will be at risk from a 70% safeguard duty proposed at that time (see 70% Safeguard Duty Detrimental For 3 To 4.5 GW PV).