- ICRA has forecast India to install around 12.5 GW in FY22 and 16 GW of new renewable energy capacity in FY23
- Factors that support the assumptions include a large project pipeline of over 55 GW
- SECI’s list of pending PSAs and PPAs has also come down from 18.8 GW in August 2021 to 9.6 GW as of December 2021
- India needs to raise funds worth over $300 billion to achieve 500 GW renewables target by 2030 and another $150 billion to $200 billion for transmission and storage infrastructure
Having exited FY 2021 (period ending March 2021) with 7.4 GW renewable energy capacity installed, India’s is moving ahead strongly and is forecast by Indian rating agency ICRA to add 12.5 GW in FY22. The prospects are even greater for FY23 when analysts see it adding 16 GW.
TaiyangNews reached out to ICRA for solar specific numbers and was told that the actual solar capacity addition in India during FY21 was 5.5 GW, and the analysts see the share of solar in FY22 to account for 10.8 GW (out of 12.5 GW RE), and 12.5 GW in FY23 (out of 16 GW RE).
The credits ratings agency’s outlook takes strength from what it counts as a more than 55 GW large project pipeline for the sector, supported by highly competitive tariffs and the country’s commitment to grow its renewables target by 2030 to 500 GW as announced during COP26 (see India Goes For Net Zero By 2070).
One of the nodal government agencies for solar power development in the country, the Solar Energy Corporation of India (SECI) reported signing 5.28 GW worth of renewable energy power sale agreements (PSA) during FY 2021-22) till October 31,2021 (see India PV News Snippets). Count in all PSAs and power purchase agreements (PPA) signed by SECI, it has brought down the pendency of the same down to 9.6 GW as of December 2021, from 18.8 GW since August 2021.
The analysts also believe high module prices along with the government’s hike in Goods and Services Tax (GST) for solar power equipment from 5% to 12% did not push up solar bids during auctions, referring to INR 2.17 per kWh tariff in December 2021.
“The ability of the developers to secure modules at less than 25 cents/watt and cost of debt funding at less than 8.5% remains important to make these projects viable,” said the analysts, adding, “The downside risks arise from the execution headwinds and supply chain challenges for procuring modules & wind turbine generators (WTGs).”
In July 2021, ICRA had said around 4 GW solar power project capacity awarded may suffer with high module price trend sustains, as metal prices also go up (see High Module Prices To Impact Project Returns In India).
Nonetheless, ICRA analysts believe the country would need to raise more than $300 billion to achieve the 500 GW target by 2030, not counting in another $150 billion to $200 billion India would need to get its transmission and storage infrastructure in place.