India’s solar market almost doubled in size in 2017, making it a record year with annual PV installations touching 9.4 GW.
In 2017, the country awarded more than 11 GW of projects through auctions, and attracted US$9.4 billion in new investments, making it the second-largest renewable energy investment market among the 103 Climatescope countries, BloombergNEF reports.
“The investment actually declined from $12.6 billion in 2016 to $10.1 billion in 2017. But this is not necessarily a negative as the country has held a series of reverse tenders that have produced cut-throat competition among developers,” the report states.
India was the world’s fifth largest clean energy investment market in 2017, jumping up from sixth place in 2016. Clean energy investments totalled $7.4 billion in the first half of 2018, with solar power projects accounting for the majority.
The country’s total installed power generating capacity stood at 346 GW in June 2018, with renewables (excluding large hydro) accounting for 71 GW.
India gets approximately three-quarters of its power from coal. For the first time, however, new renewable energy installations in India in 2017 exceeded those of coal power plants. The government of India has reduced its coal capacity target for 2027 by 11 GW to 238 GW as the country seeks to replace coal with renewables through auctions, the report adds.
It continues that India, despite its relatively high Weighted Average Cost of Capital (WACC) for renewables – around 8% today for wind and solar, down from 12% in 2017 – has some of the lowest levelized costs for solar and wind, at around $40/MWh. This is mainly due to the country’s very competitive environment, which forces renewable developers to achieve comparatively low capex and opex by global standards.
The Ministry for New and Renewable Energy aims to hold auctions for 80 GW of solar and 28 GW of wind projects between 2018 and 2020, to achieve its stated target of 175 GW of renewable energy capacity by March 2022.