India will need to add over 15,000 MW solar capacity every year to achieve the target of 1,00,000 MW by 2022, a study has said. The country’s installed solar capacity fell short of target of 17,000 MW by the end of the financial year 2016-17, according to the joint study undertaken by NEC Technologies and industry body Assocham. “The country will need to significantly ramp up the pace of solar capacity additions by 10,000 MW this fiscal and over 15,000 MW per year to meet the 2022 target of 1,00,000 MW (100GW), which the government set up in 2014,” it said. The biggest technological issue in terms of solar is the efficiency of solar cells, the study said.
“Currently, the efficiency ranges from 12-20 per cent, though this continues to improve. The rest of the energy striking the panel is either reflected or is wasted as heat. The main issue with efficiency is that higher efficiency solar panels cannot be commercially mass produced,” it said. To achieve the 1,00,000 GW target by 2022, the focus has slightly shifted from indigenous manufacturing as policies to curb the imports from other countries are not benefiting the domestic manufacturing. Furthermore, the increase in taxes in the GST structure in solar from zero per cent to 5 per cent, coupled with reduced taxes in coal from 11.69 per cent to 5 per cent, may lead to slow adoption of solar in the Indian energy sector, the study said. Lack of uniform policies across sectors and implementation issues is also an area of concern, it said.
“In India subsidy structure is complex and there are involvement of multiple agencies. Land allotment is a long procedure in India, which requires approvals at different levels from authorities.” Currently, the foreign investment in Indian solar industry is less than 20 per cent, the report said. Even 100 per cent FDI under automatic route and 74 per cent through foreign equity participation in a joint venture (without approval) have not paved the way for significant foreign investments in this sector, it added