With an upbeat scenario across the globe for renewables, in particular for solar, India too seems optimistic to make the entire renewable portfolio solar driven. The massive targeted capacity of 100 GW , which the GoI has aimed to be achieved from solar by 2022 bears a testimony to the fact. It is projected that with this aimed capacity, solar energy in India is poised to constitute nearly 57% of the total renewable share by the end of 13th FYP. Presently, the total installed capacity of solar energy in India stands to be near 3 GW, although to bridge such a wide gap of 97GW within the time span of seven years seems to be a distant reality. But the recent initiatives such as “Vibrant Gujarat Summit 2015” show enough faith on the Indian government to change the fate of solar power in India.
In order to emerge out as the prime destination for global majors to invest in solar, India is not keeping any stone unturned in dishing out not only the conventional but the eccentric opportunities as well in the solar segment. Under the umbrella of unconventional solar power which typically includes solar rooftops, solar parks, UMPPS, solar pumps etc the country has diversified the course of investments into the segment.However, harnessing solar energy via rooftops and pumps is not a new concept for India and was practiced erstwhile as well, but was at the backfoot. With the intent of government for making India to “Go Solar”, business case for these eccentric solar segments have gained momentum. It is significant to note that, only solar rooftops on a standalone basis are poised to generate an investment tune of INR 500 crores by 2022 with 35-41 GW of targeted capacity.
In what could be termed as a remarkable fillip to solar power not only in India but also for the world over is the “right approach” to energy which ensures sustainable development, economic dynamism and environmental sustainability. The recently concluded “Vibrant Gujarat” summit not only signifies the intent of GoI to promote solar power in the country but also is a clear testimony to enhanced interests of not only global majors but also the domestic industry leaders to invest and tap the underlying eccentric opportunities.With the likes SunEdison and Adani Group to foster a JV which would invest to the tune of USD 4 Billion to develop a solar park in the state of Gujarat through ultra low cost solar panels the opportunity to have competitive solar power availability is developed for India.
The massive planned investment to the tune of USD 100 Billion in the solar segment by 2022 is definitely going to make India amongst the most desirous economies to invest in for the global majors. It is significant to note that of this total planned investment, nearly USD 70 Billion is most likely to be sourced from private channels. Not only this, many international players as well have announced their investment plans for the Indian solar segment. It is pertinent to note that an enormous tune of investment of USD 80 Billion is projected to route in from USA & Japan by 2022.
It could be observed from Exhibit 01, of the given global majors US is keen to invest upto the tune of USD 42 Billion to develop solar power in India. It is projected that US is most likely to strengthen the solar energy in southern part of India, whereas with a tune of USD 38 Billion Japan is estimated to harness the tremendous potential of solar power in the northern & western regions giving enough fillip to the existing capacity to reach the visionary target of 100GW.
The unconventional opportunity space in solar for a huge country like India remains untapped at large so far, with not much of the initiatives taken in the past. But, over the last one year GoI has shown enough faith in the unleashing the hidden potential of this eccentric gambit of solar. It is pertinent to note that with these eccentric segments the solar capacity of India is impended to witness a rise of nearly 120 GW by 2025, if government continues to show enough dedication. It could be observed from Exhibit 02 that about 57 GW of solar capacity is projected to be harnessed from solar rooftops. Of this potential, nearly 25 GW is estimated to be generated from residential rooftops, where as commercial & industrial rooftops are projected to support about 32 GW. It could also be seen from the figure that however, solar parks indicates the maximum potential of 37GW but, the availability of land and setting up massive transmission infra could be a serious concern refraining the segment dominating the opportunity pie.Along with targeting additions in the existing solar capacity, GoI has also taken initiatives in regards to reducing the cost of solar power as well. It is pertinent to note that a substantial reduction of 25-30% has been targeted to bring down the existing solar power of INR 7-8 / unit to INR 4.50 / unit by the end of 2015. If it happens, would give enough thrust to the players to invest even more in the segment and would make a sizeable increase in the underlying opportunities across the value chain. The opportunity split for major players could be observed from Exhibit 03.
It can be observed from Exhibit 04, that maximum opportunity lies for the players in the solar rooftop segment. Of the total planned investment in the solar segment, maximum opportunity lies for the players involved either in the installations of solar PV rooftops. It is pertinent to note that the PV rooftops in India are projected to occupy an opportunity share of 25% by 2022. Where as in comparison to this share, PV based solar parks and UMPPs would constitute a share of close to 15% and 12% respectively by 2022.
Transformation Map for the Eccentric Solar Industry in India by 2022