India’s short-term hurdles won’t stop four-fold PV boom in a decade

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email
Fitch Solutions: Existing renewable support policies will be respected even if Modi is not re-elected (Credit: Shivam Kumar / Pixabay)

Policy headwinds in India will not divert the PV sector from a decade-long path of colossal growth backed by the government, according to Fitch Solutions.

The firm’s latest update predicts Indian PV capacity to ramp up by an average, annual 15.3% between 2018 and 2028, jumping from 26GW to 105.9GW in the period.

The government, Fitch Solutions said, will keep up the momentum through a recipe of “aggressive” growth targets, numerous tenders and policies to unlock investment towards solar.

Thailand, Vietnam imports to sidestep tariffs for China

According to the firm, India’s adoption last year of 25% tariffs for Chinese and Malaysian cells and modules will create uncertainties and costs but these will lessen in the long term.

The duties, Fitch Solutions argued, will likely be scrapped after their two-year expiry date, if it emerges they didn’t succeed in kickstarting a local manufacturing scene able to compete with Chinese imports.

In the interim, the firm continued, plummeting technology costs mean developers can resort to alternative import routes; Thailand and Vietnam, which Chinese manufacturers are expanding to, are already being tapped into.

According to Fitch Solutions, the lack of clarity around the goods and services tax – thought to up PV costs by 5.8% since its roll-out in 2017 – looks set to dispel. Last December’s government clarifications pave the way for developers to negotiate tax reliefs for existing PPAs.

PV’s wish list as India heads to the polls

The Indian PV predictions herald a brighter outlook after a tough 2018, when execution challenges and policy uncertainty sparked a 27.8% drop in installations.

The government – currently in the midst of six-week general elections – has been urged by consultants to “work hard” to restore investor confidence after last year’s “hammering”.

The prediction of Fitch Solutions is that even if prime minister Narendra Modi is not re-elected – in its view, such a scenario is not likely – his successors would respect existing policies to promote renewables.

As the firm noted, the reform set in motion in recent years includes 12GW in installations through the Central Public Sector Undertaking programme, the adoption of renewable power obligations and grid upgrades; Tamil Nadu and other states are adding to the efforts with separate targets and schemes.

Read Next

February 25, 2021
Solar inverter supplier Sungrow will grow its manufacturing capacity in India to 10GW this year.
February 25, 2021
Independent power producer ReNew Power has agreed to go public through a merger with RMG Acquisition Corporation II, a US special purpose acquisition company (SPAC), in a deal that values the combined entity at US$8 billion
February 23, 2021
Strong installs expected in China, India and other markets as supply chain concerns ease and costs drop further
February 23, 2021
Solavio Labs, an Indian start-up that provides autonomous solar panel cleaning technology, is expanding its footprint to North America and the Middle East after securing fresh funding.
February 22, 2021
Six Renewables Energy Zones to be created in Victoria as new ‘VicGrid’ body created to oversee the plans
February 11, 2021
Azure Power overcame module procurement challenges to end its third quarter with 1,987MW of operational solar capacity, a 10% increase year-on-year.

Subscribe to Newsletter

Upcoming Events

Solar Media Events, Upcoming Webinars
March 9, 2021
Solar Media Events
March 17, 2021
Solar Media Events
April 13, 2021
Solar Media Events
April 20, 2021
Solar Media Events
June 15, 2021