Knowledge paper on “Solar Industry in India: Challenges & Way Ahead”

Tata Strategic Management Group, the largest Indian-owned management consulting firm, today published a report titled, ‘Solar Industry in India: Challenges & Way Ahead’ for the 4th Annual Global Solar EPC Summit 2014, as a knowledge and strategy partner for Solar Quarter at New Delhi. The report is a source of insights and information on the solar sector for PV power plants. The report acts as a guide to industry stake holders to gain an insight into the current status and action points for unleashing the hidden solar potential. Publishing of the report is highly relevant as the solar power is touted to be the next big thing in power and poised towards a high growth trajectory in the next 5-7 years.

The report brings out insights on various global solar markets and policy initiatives therein. Extensive primary interactions were carried out with multiple stakeholders including policy makers, regulators, developers, original equipment manufacturers, balance of plant manufacturers, engineering consultants to capture the views to capture upcoming trends in the solar sector and the challenges being faced by various stakeholders in India. Some of the challenges highlighted by the industry participants are regulatory inconsistency, lack of Renewable Purchase Obligation (RPO) enforcement and increasing competition in the sector. Key lessons learnt so far include establishing prudent Quality Control (QC) parameters for solar installations, consistent capacity addition through well planned central and state programs, enforcement of RPO, close monitoring for early fault detection. Further, some of the key actions recommended include long term consistent solar policy, rolling out regulations like net metering and open access for the development of the sector. Other important recommendation is development of solar manufacturing ecosystem and allied infrastructure.

Mr. Manish Panchal, Practice Head - Chemical & Energy, Tata Strategic Management Group, said, “Our endeavour through this report is to highlight the challenges that are stopping the solar sector to grow at its real potential. Solar being a sunrise sector in India requires the coordinated participation of all the key stakeholders especially the regulators to develop the right frameworks for it to grow.”

Mr. Shardul Kulkarni, Principal - Energy, Tata Strategic Management Group, said, “The report highlights the shift of solar sector from being policy driven to parity driven. The focus now should be on roll-out of a few important policies like net metering for the sector. The growth post such initiatives would be exponential as it the only hedge available against rising conventional power tariffs.”

Key Highlights of the Knowledge Paper:

  • India’s energy consumption is growing at more than 6% CAGR making it one of the fastest growing countries in terms of energy consumption. Currently, it is the third largest consumer of energy in the world just after China and USA
  • The investments in renewable energy globally has declined in the last 2 years due to the rapid decline in module prices in the last 2 years. This rapid decline of module prices have brought the solar power generation costs close to the conventional cost of power bringing it close to grid parity level and leading to solar sector’s rapid growth
  • Most of the industry stakeholders in India have been focused on quantitative capacity addition and have not paid adequate attention to the qualitative aspects leading to lesser than designed generations for several solar plants
  • Though solar insolation is a free resource and solar power an efficient means of generating power, the stakeholders need to pay adequate attention to quality aspects of the installations to ensure return on investments and win investors’ confidence

Key challenges for Indian Solar Sector-

  • Lack of consistency in solar policy
  • Lack of strict policy enforcement by regulators
  • Land acquisitions  and other clearance processes not standardized
  • Irrational exuberance from inexperienced players
  • Non availability of non-recourse project based funding
  • Sub-standard panels resulting in low PLF
  • No centralized monitoring of solar power plants
  • Lack of trained technical manpower at site generally located in remote locations

Key lessons to strategically guide the sector to its real potential-

  • Focus should be on qualitative capacity addition rather being solely focused on quantitative capacity addition
  • Policy formulation has been good but it has not translated into policy implementation especially for the state level programmes
  • Monitoring of solar plants is difficult as they are located in remote locations. Several plants are not monitored while the rest are monitored manually
  • DCR (Domestic Content Requirement) is an important step but not enough to develop solar manufacturing capability in India
  • The need of the hour is to focus on value added product & services, build R&D and testing facilities and develop trained manpower to support the growth of the solar in India
Training & Education | News published on 03/06/2014 by Moulin

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