By Kari Williamson
The Indian solar market is expected to be spurred by the maturing National Solar Mission (NSM) and a collection of state-level incentives, as well as an influx of expertise from global solar players entering India.
At year-end 2010, India had 54 MW of installed grid-connected solar. However, recent feed-in tariff allocations from the NSM and the state of Gujarat’s Solar Policy promise to increase that installed capacity six-fold to approximately 365 MW by the end of 2011 and, furthermore, to over 1.1 GW by 2012.
“Solar in India is set to grow significantly over the next 10 years,” says Dr. Tobias Engelmeier, Managing Director at BRIDGE TO INDIA and the report’s lead author.
“This growth will be driven by rising power demand and fossil fuel prices, the ambition of the NSM and various state-level initiatives, as well as by renewable energy quotas, including solar energy quotas for utilities and the subsequent gains in solar cost reduction.”
Some clouds
Although India's solar policy and project pipelines remain robust, developers face a number of challenges – especially that of project bankability and financing.
“Financing is the number one concern for anyone developing solar in India,” says Shayle Kann, Managing Director of Solar at GTM Research.
“To ease that pressure and eventually realise the market’s potential, we expect to see the competitive landscape evolve dramatically via strategic partnerships and joint ventures; India will benefit from the development expertise of global solar incumbents and these incumbents in turn will benefit from having a local partner to navigate the country’s complex energy market.”
First movers
To date, first movers such as SunEdison, juwi solar, AES Solar, Conergy, Gehrlicher Solar, and Enfinity have employed this strategy to enter India, teaming with local developers or EPC providers to gain early market share or build viable project pipelines.
Foreign solar module manufacturers have also made in-roads, opening initial supply channels in India; included in this group are thin-film suppliers, First Solar, Solar Frontier and Abound Solar, as well as crystalline-silicon manufacturers, Trina Solar and Suntech.