Print Friendly, PDF & Email

Insights into Editorial: India’s solar capacity: Milestones and challenges



India added a record 10 Gigawatt (GW) of solar energy to its cumulative installed capacity in 2021.

This has been the highest 12-month capacity addition, recording nearly a 200% year-on-year growth. India has now surpassed 50 GW of cumulative installed solar capacity, as on 28 February 2022.

This is a milestone in India’s journey towards generating 500 GW from renewable energy by 2030, of which 300 GW is expected to come from solar power.

India’s capacity additions rank the country fifth in solar power deployment, contributing nearly 6.5% to the global cumulative capacity of 709.68 GW.


Renewable Energy (RE) Capacity of India:

The country’s installed Renewable Energy (RE) capacity stands at 150.54 GW (solar: 48.55 GW, wind: 40.03 GW, Small hydro Power: 4.83, Bio-power: 10.62, Large Hydro: 46.51 GW) as on November 2021 while its nuclear energy based installed electricity capacity stands at 6.78 GW.

India has the 4th largest wind power capacity in the world.

This brings the total non-fossil based installed energy capacity to 157.32 GW which is 40.1% of the total installed electricity capacity of 392.01 GW.

At the COP26 India is committed to achieving 500 GW of installed electricity capacity from non-fossil fuel sources by the year 2030.


Why is India falling short in roof-top solar installations?

Even as India continues down this impressive journey, there are some areas of concern to highlight.

  1. First, of the 50 GW installed solar capacity, an overwhelming 42 GW comes from ground-mounted solar photovoltaic (PV) systems, and only 6.48 GW comes from roof top solar (RTS); and 1.48 GW from off-grid solar PV.
  2. The steep rise in large, ground-mounted solar energy is indicative of the strong push towards increasing the share of utility-scale solar projects across the country.
  3. RTS deployment stands at 6.48 GW in 2021, far short on the Union Government’s target of 40 GW of RTS by end 2022.
  4. The large-scale solar PV focus fails to exploit the many benefits of decentralised renewable energy (DRE) options, including reduction in transmission and distribution (T&D) losses.
  5. One of the primary benefits of solar PV technology is that it can be installed at the point of consumption, significantly reducing the need for large capital-intensive transmission infrastructure.
  6. This is not an either/or situation; India needs to deploy both large and smaller-scale solar PV, and particularly needs to expand RTS efforts.
  7. However, there is limited financing for residential consumers and Small and Medium Enterprises (SMEs) who want to install RTS.
  8. Coupled with lukewarm responses from electricity distribution companies (DISCOMS) to supporting net metering, RTS continues to see low uptake across the country.
  9. Increased awareness, and affordable finance for RTS projects could potentially ensure the spread of RTS across the scores of SMEs and homes around the country.
  10. Aggregating roof spaces could also help reduce overall costs of RTS installations and enable developing economies of scale.


What are the challenges to India’s solar power capacity addition?

  1. Despite significant growth in the installed solar capacity, the contribution of solar energy to the country’s power generation has not grown at the same pace.
  2. In 2019-20, for instance, solar power contributed only 3.6% (50 billion units) of India’s total power generation of 1390 BU.
  3. The utility-scale solar PV sector continues to face challenges like land costs, high T&D losses and other inefficiencies, and grid integration challenges.
  4. There have also been conflicts with local communities and biodiversity protection norms.
  5. Also, while India has achieved record low tariffs for solar power generation in the utility-scale segment, this has not translated into cheaper power for end-consumers.


What’s the state of India’s domestic solar module manufacturing capacity?

  1. Domestic manufacturing capacities in the solar sector do not match up to the present potential demand for solar power in the country.
  2. Crisil’s report on the subject highlights that as on March 31, 2021, India had 3 GW capacity for solar cell production and 8 GW for solar panel production capacity.
  3. Moreover, backward integration in the solar value chain is absent as India has no capacity for manufacturing solar wafers and polysilicon.
  4. In 2021-22, India imported nearly $76.62 billion worth solar cells and modules from China alone, accounting for 6% of India’s total imports that year.
  5. Low manufacturing capacities, coupled with cheaper imports from China have rendered Indian products uncompetitive in the domestic market.
  6. This situation can, however, be corrected if India embraces a circular economy model for solar systems. This would allow solar PV waste to be recycled and reused in the solar PV supply chain.
  7. By the end of 2030, India will likely produce nearly 34,600 metric tonnes of solar PV waste.
  8. The International Renewable Energy Agency (IRENA) estimates that the global value of recoverable materials from solar PV waste could exceed $15 billion.
  9. Currently, only the European Union has taken decisive steps in managing solar PV waste. India could look at developing appropriate guidelines around Extended Producer Responsibility (EPR), which means holding manufacturers accountable for the entire life cycle of solar PV products and creating standards for waste recycling.
  10. This could give domestic manufacturers a competitive edge and go a long way in addressing waste management and supply side constraints.


What are the key takeaways from India’s solar story?

India has grown from strength to strength in overcoming barriers to achieve the 50 GW milestone in Feb 2022.

The destination is clear, and the journey is progressing. As India attempts to deal with some of the shortcomings identified above, India’s solar story will continue to provide important lessons for other developing countries that are looking to transition to clean energy.

India has achieved its target of achieving 40% of its installed electricity capacity from non-fossil energy sources by 2030 in November 2021.

India had committed to this target at COP 21 (UNFCCC) , as part of its Nationally Determined Contributions (NDCs) (Paris Agreement).



Technology sharing and finance could also become important aspects of ISA in the future, allowing a meaningful cooperation between countries in the solar energy sector.

In addition to an impressive domestic track record, through the International Solar Alliance (ISA) established by India and France at COP-21 in 2015, there is a global platform to bring countries together to facilitate collaboration on issues such as mobilising investments, capacity building, program support and advocacy and analytics on solar energy.

Governments, utilities, and banks will need to explore innovative financial mechanisms that bring down the cost of loans and reduce the risk of investment for lenders.