Govt’s ambitious solar power target is a call for both large and small players to get in
The government push for raising solar power generation capacity to 100,000 MW by 2022 is a golden opportunity for solar equipment manufacturers to enter the otherwise high-investment energy industry, according to Rolta Power CEO Aditya Singh.
The Narendra Modi government has reportedly raised the solar generation target five-fold from the earlier target of 20,000 MW in 2022 envisaged in the Solar Mission.
“If you want to achieve that kind of capacity in seven years, you need everybody to contribute, irrespective of the size of the contribution”, said Singh.”Even if large players come in, there is still massive demand left.”
The company, a part of the diversified Rolta Power Group, commissioned a photovoltaic (PV) modules manufacturing plant of 60 MW annual capacity in September 2014 and plans to setup another 150 MW capacity plant by end of CY15. The company expects to invest around R250 crore in the project.
Reuters reported last week that Modi wants companies from China, Japan, Germany and the United States to lead investments of $100 billion over seven years to increase India’s solar energy.
“This is an industry which does not require a huge investment to take off. So big groups do not have an edge over us financially,” Singh said.
Experts say reaching 100 GW by 2022 would require solar capacity addition of 20 GW each in the next two years.
Large overcapacity resulting in low utilisation, coupled with a severe drop in prices, had plagued the global solar photovoltaic manufacturing industry till the beginning of CY13, credit rating agency Icra said in an August 2014 report. This resulted in vast manufacturing capacities across the PV manufacturing value chain idling. However, the situation has since stabilised.
Fuel shortage, volatility in prices, supply issues and policy paralysis plagued the thermal power generation sector the past couple of years. This brought into focus renewable energy sectors such as wind and solar which do not pose the fuel problems. India, which has about 300 days of sunshine annually, has the potential to host a solar power project almost anywhere.
Solar PV installations in India crossed 2.6 GW at the end of FY14 with about 1.1GW of manufacturing capacity commissioned during the current financial year. The government’s solar power push is now expected to bring more manufacturers to the market.
The past year has seen a spate of new solar power projects such as the R808-crore 100 MW solar project in Rajasthan, partly funded by the International Finance Corp. Madhya Pradesh is setting up a 750 MW plant touted to be the world’s biggest solar power unit with World Bank partly funding the asset.
The ministry of new and renewable energy is rolling out a scheme for setting up 25 solar parks, including ones with ultra mega solar power projects of 500 MW or more. The ministry expects to commission the projects by FY19 and the plan will have an estimated central financial assistance of R4,050 crore. The scheme has got Presidential sanction last month, according to a senior ministry official.
Till December 15, 2014, the country has a total commissioned solar manufacturing capacity of 3,002.66 MW, with Gujarat leading the state tally with operating capacity of 929 MW, followed closely by Rajasthan with 839.5 MW.