After a good start two years ago, solar capacity addition seems to be hitting the slow growth lane. India is forecast to see flat capacity addition in 2014 when compared with 2013 even as the global market may improve capacity by about 24 per cent in the current calendar year.
The total new solar power capacity addition in the country is forecast at about 1,000 MW for 2014. But, there was very little growth in installations year-over-year and the solar installations in India stood at 1,004 MW for 2013 when compared with 986 MW in 2012, points out Mercom Capital, a global clean energy communications and consulting firm.
As on January 31, 2014, cumulative grid-interactive solar power installed capacity in the country stood at 2,208 MW, which was 7 per cent of India’s total renewable power capacity. Several factors are being cited for the slow growth in solar capacity addition. With a few exceptions, there are no Jawaharlal Nehru National Solar Mission (JNNSM) PV projects expected to come online until at least mid-2015. Most CSP (Concentrated Solar Power) projects have stalled, while India is now in a trade dispute with the U.S. in the World Trade Organization.
“It is time for developers to go directly to consumers, there is a large power-starved market waiting to be served that looks better and better every day as diesel prices keep climbing,” said Raj Prabhu, CEO and Co-Founder of Mercom Capital Group.
Apart from difficulties with project economic viability stemming from reverse auctions that have pushed down project margins, frequent delays in State policies, lack of enforcement for renewable purchase obligation (RPO) norms and the upcoming national elections are adding more uncertainty to India’s solar market which may result in a slowdown in large-scale solar project installations, said the firm.