Solar Energy Sector in India: Challenges and Prospects 

Introduction: 

India has evolved as one of the most dedicated countries over  the years when it comes to utilizing non-conventional, renew able energy sources. Indian Solar Energy sector comes at  the 5th position in the world in terms of solar power across  its plants, which contribute about 38 percent of India’s total  renewable energy capacity. It is on track to overtake Japan  as the third-largest PV market, with an 8.8 GW of expected  capacity increase.  

The Indian renewable energy sector is growing rapidly, driv ing the energy transformation both regionally and globally with  one of the largest, and most ambitious, renewable energy pro grams in the world. By 2022, India sets the target of 175 GW  of installed renewable energy capacity, including 100 GW of  solar, 60 GW of wind, 10 GW of biomass and 5 GW of small  hydropower. Over USD 70 billion investment has been made in  renewable energy in India over the past seven years.  

Challenges faced by Solar Energy Sector in India

Renewable Energy in India has seen a tremendous growth tra jectory of Solar in the Utility Sector. It has come from being a  fledgling part to becoming a mainstay in the Renewable Ener gy sector and a key component in the overall Power sector in  India. But there are few challenges in the way of India’s Solar  Energy Sector: 

• Dependency on China: India still is largely dependent on  foreign countries like China for solar modules. Self-reliance  will give a boost to the solar energy sector in the country.  The launch of the PLI (Production-Linked Incentives) scheme  seeks to incentivize domestic manufacturing. This will help India to cultivate a strong domestic solar energy market. Given its geographical location and abundance of resources, India  is nicely positioned to become a global hub of solar manufac turing. India needs to be able to compete with China’s strong  manufacturing base that gives stiff challenges to Indian do mestic manufactures to achieve self-reliance in the solar en ergy sector. 

• Scarcity of land: Per capita land availability in India is very  low, and land is a scarce resource. Rapid reduction in the size  of the land area near substations for the installation of solar  cells might have to compete with other necessities that require  land. Solar projects that are ground-mounted require a vast  area for installation, which creates problems in some regions.  It has created opportunities for R&D and in the future, we have  to come up with more compact solar projects. 

• Lack of financing mechanism: There is a lack of financing  options that allow borrowers to borrow large sums of money for  longer tenures at low interest rates. Today, most of the custom ers of solar products are farmers, who do not have that kind of  wealth, certain solar products become inaccessible to them.  PM-KUSUM Yojana is helping the farmers get solar pumps at  subsidized prices. Funding in many initiatives started by the  authorities such as the National Solar Mission is a constraint  given India’s inadequate financing capabilities.  

• Low tariffs: Solar tariffs are very low in India as compared  to other countries that make them unsustainable for some de velopers and can lead to compromise in the quality of solar  panels. So, the companies have to maintain viability issues  both in terms of tariff and profitability. 

• Losses in Cost and T&D (Transmission and Distribution): Cost competitiveness in Solar PV and competing on the  same scale as other energy generation technologies are some  other problems faced by the solar energy sector. The cost of  T&D losses is approximately 40 percent, making generation  through solar energy sources highly unfeasible. The boost  by the government to R&D activities by establishing research  centers and funding gives some relief to solar energy players.  Tie-up of the authorities with the world-renowned universities  to bring down the installation cost of solar power sources and  is focusing on upgradation of substations and T&D lines to re duce T&D losses are some measures taken in this regard. 
 

• Fluctuation in the temperature and solar radiation af fects the power quality of PV systems. Growth in the connec tion densities at the distribution grid and low irradiance can  lead to an undesirable variation of power supply quality and  remains to be addressed. 

Government’s Initiatives: 

The Government of India is leading by example through the  installation of solar rooftops widely on government buildings,  airports, railways networks, educational institutions, residen tial sector and commercial complexes. The government from  time to time has launched several initiatives over the years with  varying degrees of success.  

The Jawaharlal Nehru National Solar Mission was launched  by the Ministry of New and Renewable Energy to achieve  2000 MW of grid-connected solar power by 2022. Pradhan  Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan Yojana  (PM-KUSUM) was launched in 2019 for the installation of agricultural solar pumps that are helping to reduce farmers’ de pendency on diesel-based generators by offering them solar  pumps on subsidies. This year, one of the major schemes, the  PLI scheme was launched to incentivize and promote domes tic manufacturing. 

Way Forward 

The Indian solar energy sector should invest prudently in  new and emerging solar technologies through strong finan cial measures that include green bonds, clean energy funds  and institutional loans. The promotion of R&D particularly in  renewable energy storage technology can help to improve the  sector’s growth. India must also take proactive steps towards  the formulation of efficient Solar PV Waste Management and  Manufacturing Standards for sustainable waste management,  to make it a truly green source of energy.  

To engage in technology diplomacy and negotiate technology  governance, India will leverage the Ministry of External Affairs’  New and Emerging Strategic Technologies (NEST) Division to  favour the Indian market. The “Empowered Technology Group”  is yet another step toward ensuring the long-term viability of  emerging technologies. In the renewable energy sector in the  future, and for a tropical country like ours, solar energy is the  best form of renewable energy that we can harness.  

With the growing eco-consciousness and government sup port, the solar energy industry will be able to become an even  more integral part of the Indian economy in the future. 

- Gautam Das,  Co-Founder & CEO,   Oorjan Cleantech