India to become ‘key pillar’ for global solar demand growth

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It is not certain whether this domestic demand will lead to growth in domestic equipment manufacturing. Credit: Sungrow

India is expected to become a “key pillar” for solar demand growth, while growth from leading nations including China, Japan and possibly the US declines, according to the latest update from consultancy firm Bridge to India.

Top international PV equipment suppliers are already concentrating on the Indian market and developing specific pricing and product strategies for it, said the consultancy.

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However, Bridge to India said it was not certain whether this domestic demand will lead to growth in domestic equipment manufacturing, despite the Indian government’s ‘Make in India’ campaign.

Referring to Indian solar manufacturing, Bridge to India said: “The competitive dynamics are stacked against this sector.”

The Goods and Services Tax (GST), which will be implemented this year, is expected to lead to cost increases on a small-scale, which may concern both developers and contractors, however, these costs are widely expected to burden the distribution companies (Discoms) instead.

From a pipeline of 14GW of utility-scale projects, Bridge to India expects 7.7GW to be commissioned in 2017. This combined with a further 1.1GW of rooftop capacity additions, should result in India deploying a total of 8.8GW solar this year – up roughly 90% over 2016.

Overall, 2017 is expected to be a “bumper year”, despite concerns over increasing levels of curtailment and weak power demand growth.

India’s cumulative installed capacity of PV is expected to reach 18GW by the end of the year. Meanwhile tariffs are expected to go below 4 rupees (US$0.06) for utility-scale projects.

Read here for highlights of the Indian solar market in 2016.

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