The Indian renewable energy sector witnessed a significant 2017. The year saw tremendous enthusiasm for solar energy with the highest ever capacity addition and lowest tariffs recorded. Towards the end of the year, the Indian government also made a resolute move to impose anti-dumping/safeguard duties on solar modules imported from China and Malaysia.
Bridge to India summarizes the solar sector status 2017 in five charts.
Annual Capacity addition
In 2017 Renewable energy surpassed the capacity addition of thermal power. As shown, in 2017 solar and wind capacity additions totaled around 15 GW, out of which solar’s contribution was 10 GW (utility around 8.5 GW and rooftop around 1.4 GW). Whereas thermal was reduced to just 2 GW.
This is significant growth in solar as compared to the years between 2014 to 2016.
Dip in the tariff
2017 also witnessed a fall in tariff rates to the lowest price of INR 2.44 ($0.03) /kWh at Bhadla solar park Rajasthan. This itself was lower than the lowest for the year, where Kadapa and Rewa tenders were bid at INR 3.15 ($0.486)/ kWh and INR 3.59 ($0.053) / kWh respectively.
Despite the increase in module costs, and the imposition of GST and import duty, it did not affect growth much, although there was a slight increase in tariff price of INR 2.65 ($ 0.04)/kWh.
A spot to look
India is making immense effort to encourage solar power by launching huge tenders. However, the completion of auctions remained slow. The falling tariffs did not encourage DISCOMs due to weak power demand.
There were also commissioning delays with developers dealing with various critical issues, like land acquisitions, GST, transport and completion permits. Falling prices also increased the competition and, in one such case, SECI canceled a tender to seek a lower tariff. However, in line with MNRE’s solar roadmap, SECI has tendered 3.2 GW solar projects in the month of January 2018.
The above chart shows the difference in the actual and scheduled commissioning of the following projects: Karnataka’s 1,200 MW, with SECI’s 920 MW and NTPC 500 MW, Uttar Pradesh 215 MW, Telangana 2,000 MW, and Madhya Pradesh 300 MW.
The above chart is based on 8.2 GW of modules used in utility-scale projects commissioned in 2017. The chart clearly shows that India’s heavy reliance on imports of solar module continues. Despite the Domestic Content Requirement (DCR) and imposing import duties, there is a little to be encouraged by for local manufacturers. India’s tussle regarding DCR also was one major issue, where the U.S. has dragged India back to the WTO. However, India said it has complied with the WTO ruling and has recently published the statement stating the compliance proof, dated December 14, 2017.