The Indian Ministry of New and Renewable Energy (MNRE) has formulated an energy roadmap to install an additional 30GW of renewable energy capacity by 2017.
The Integrated Energy Policy looks to expand its energy supply options and ways in which to increase the country’s renewable energy capacity on a large scale. The MNRE attributes the current rapid growth in domestic production to the central government’s Jawaharlal Nehru National Solar Mission (JNNSM), which aims to install 10GW of PV capacity by 2017. Current capacity stands at 2GW.
In addition to the roadmap, the government is also developing various financial incentives.
Last week, the MNRE announced plans to adopt a viability gap funding (VGF) model for the second phase of its Jawaharlal Nehru National Solar Mission (JNNSM), to provide financing to grid-connected solar power projects. However, consulting firm Mercom Capital said the VGF would be a “pretty risky approach” because energy projects currently under this scheme have so far been unsuccessful.
The government is also considering introducing Renewable Energy Certificates and Renewable Purchase Obligations to spur the growth of solar.
However, Hari Manoharan from Indian consulting firm RESolve, believes the 30GW target may prove difficult to achieve.
“To put it in perspective, this would require about 6GW per year of renewable energy additions,” he said, adding that this could be feasible, but would “require significant effort”.
Manoharan also disagreed that central government policy would encourage growth of the solar sector: “Over the course of the next five years, [the solar industry] is likely to be driven by the various policies adopted by each state rather than a central policy like, say, JNNSM.”
Furthermore, attaining this target could be hindered by the fact that not all manufacturers are operating at full capacity. Manoharan said: “Most of the domestic manufacturers are operating at 10% to 20% of their capacity. With such low rates of utilisation, it would be very hard for domestic manufacturers to compete with the global market.”
The Indian Solar Manufacturers’ Association attributes the lacklustre performance of its domestic industry to competition from foreign manufacturers. The Association has filed a complaint with the government alleging that module suppliers from the US, China, Malaysia and Taiwan are selling below cost, or “dumping”, on the Indian market.
In spite of the good intentions behind these actions, Manoharan believes the damage has already been done: “Developers are likely to be affected by this [trade case] as they may not always be able to secure the lowest possible price or the best quality modules.”
As a result of India’s trade case, the US government last month filed a complaint with the World Trade Organization over India's national solar programme, claiming it is “discriminatory” against US solar manufacturers.
It has requested the WTO initiate dispute settlement consultations with India following the Ministry of Commerce’s anti-dumping investigation against US solar manufacturers.