Key issues impacting Solar Industry today in India - Feedback

The issues impacting the Solar Industry today could be clubbed under 3 timeline horizons; Immediate, Mid-term and Long term:


  • Financing – How does 100GW or 60GW of Grid Connected by 2022 get funded? This needs a lot of clarity and one needs immediate solutions. For projects > 100MW, there are still many options including international financing routes, it is the projects in the >20 to 100 MW which have very less options and is bound to trip up if no long term solutions are in place.
  • Free fall of Tariffs – The Solar market has not yet reached a stage for such steep fall in Tariffs and such low prices could kill the emerging industry on 2 accounts – Serious large players will walk away from such markets and Small players cannot compete seriously. There is a risk of this impacting the quality of projects and equipment used. A sun rise industry at this stage can hardly afford to have failures at such an early stage.
  • Roof-Top Industry Creation – The nascent RFT market urgently requires participation from large corporates to take this from a small “Off-grid” business to a commercially viable Urban/Industrial solution. This can be done only participation of large corporates with deep pockets.

Mid-term (2 years)

  • Transmission Corridors – The investment in corridors have been lined up now and one needs to see the results soon enough. The current infrastructure is supporting the small beginning, but soon enough in 2-3 years, we will see the emergence of tens of GW and then, this becomes imperative. There is a need for holistic approach to Green transmission planning and execution.
  • Land acquisition – The industry is currently welcomed by most states and the center with the creation of Solar Parks, where they do not have to worry of this aspect. But, soon, we will come to a stage when this may seem to be inadequate and Developers may have to approach open market to buy land. India needs to sort the land procurement process by then.
  • Grid Stabilization – We expect the issues of grid stabilization to crop up in the next 2-3 years when the Grid connected solar power is likely to cross 15-20GW. That is the time when our Utilities will need Grid Stabilization solutions and the associated costs will matter. Another important aspect, is the cost and technology rise in the Storage Segment. This will also have a bearing in these Grid Stabilization solutions.

Long Terms (4-5 years)

  • Health of Discoms – Even though, there is a talk of grid parity soon, Solar power is likely to be a costly power and one needs a strong utility which will have the capability to absorb this RE power. The current plan of UDAY to restructure DISCOM’s is a welcome gesture and one hopes, that, we do see a turn-around in the financial health of DISCOM’s and they become strong enough to absorb RE power.
About A. M. Devendranath

Vice President, Head - Energy Practice Feedback Business Consulting Services Private Limited I

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