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Solar Power in India: 2018 in Review & What 2019 Has in Store India is expected to add 10GW of solar capacity in 2019 which should help boost India's overall renewable energy share cross 10per cent by 2020

By Ashit Maru

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2018 was a good year for the Indian solar sector. Having said that, there have been hurdles along the way which slowed down the pace of the industry and prevented it from being a great year. The first quarter saw an increase of 3,344 MW installed solar capacity, and according to the latest report from Mercom India Research, and India has been forecasted to install approximately 8 GW of solar capacity in the entire calendar year.

On the flip side, policy level changes and obstacles in the overall implementation of solar-related guidelines proved to be a speed breaker.

Causes Behind the Slump

Policy-Level Problems-In last year, there was little momentum in terms of solar capacity addition. While the first quarter of 2018 was extremely positive, the third quarter only resulted in 1589 MW addition, a 4 per cent decline when compared to 1,659 MWs installed in Q2. One of the significant setbacks was the safeguard duty levied on the import of solar cells and panels from countries such as China, Malaysia and many other nations. In a move to protect local manufacturers and small enterprises that have been manufacturing solar cells and panels. The safeguard duty, structured at 25per cent for one year, 20per cent for the next six months, and 15per cent for the subsequent six months, have hit the industry hard, as it has increased costs for solar developers. Furthermore, the cap of INR 2.5 per unit imposed for solar projects by MNRE has had a negative impact on the industry growth.

Tepid Bidding- Recently, Solar Energy Corporation of India (SECI) had issued tenders for 150 MW of floating solar power projects at Rihand dam in UP. After subsequent delays due to a tepid response from bidders on account of lower tariffs, some of the projects have been taken up by renewable energy developers. However, the delay in tenders and under-subscription have discouraged investors and they have opted to stay away from the solar sector. This is just one case, there were several other tenders throughout the year that were met with colder than expected responses. The fact that INR 2.44/unit mark still stands shows that the sector did not get the aggressive push perhaps that was expected

On-Ground Uncertainties- State-wise net metering inconsistencies continued to be a hindrance in the development of the Indian solar sector, especially rooftop solar. States are still hesitant to provide a robust policy environment for net metering as the DISCOMs do not want to sacrifice premium customers who pay a high tariff. The limit on project size, which is usually 1 MW for rooftop solar projects has kept a lot of large commercial and industrial customers from installing rooftop solar to meet their energy needs. The lengthy net metering approval process in some states and a lack of financing options for solar customers has further hindered the development of the sector.

Problems for the End-Consumer- While a lot of effort has been made to inform end-consumers and single-point buyers, such as residential users, about the benefits of going solar. These efforts have lacked coherence and impact. For instance, consumers are still not aware of the financial benefits solar can bring and still consider it as an expensive investment. A concerted effort needs to be made to inform consumers about the long-term saving benefits and cost optimization achieved through implementation of solar. Furthermore, easy financing facilities; need to be extended. The industry is still at a teething stage, and encouragement through financial facilitation is necessary to give it the boost it needs.

Future Trends

As per the latest Mercom report, 26GW of solar has already been installed of the 100 GW solar target, but there is a long road ahead for the solar industry. However, the morale amongst industry leaders is still high as the awareness among both industrial and residential buyers is gradually increasing. India is expected to add 10 GW of solar capacity in 2019 which should help boost India's overall renewable energy share cross 10per cent by 2020.

On the technology front, the PERC (Passivated emitter rear contract) equipped monocrystalline cells are predicted to be the next big thing in solar in 2019, as the technology is forecasted to have acquired over 50 per cent of the global market share in 2018 as per Mercom.

Furthermore, the popularization of grid-connected hybrid systems can provide customers with the ease and convenience to switch to solar without paying exorbitant prices. Not to mention, off-grid and hybrid-powered solar systems should see more development in the coming years as the industry continues to grow especially in the storage space.

As of now, category awareness amongst the retail sector is still limited and people still need convincing to choose solar energy as a cheaper and cleaner alternative source of energy. A strong focus by the government and industry stakeholders to develop consumer interest through collective marketing, and affordable financing options will go a long way in helping the sunshine on India's solar sector.

Ashit Maru

Co-Founder, MYSUN

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