India emerges as a frontrunner in the global shift towards green energy, with solar power leading the charge
Steadfast in its pursuit of becoming a $5 trillion economy by 2024-25, India continues to ascend to the position of a frontrunner in the global shift towards green energy. Solar power spearheads this transformative journey having contributed 53.2 per cent of the overall capacity addition to India’s cumulative power generation capacity, which soared to 428.3 GW by the close of December 2023.
The solar industry statistics above do not just paint a bright picture; they aren’t just a testament to its environmental stewardship, but rather one to its self-sufficiency and its contribution to the transformation of the global energy environment. What a remarkable journey this continues to be!
Of all RE sources, the versatility of solar energy renders it scalable and inclusive as a solution for implementing the green agenda. A plethora of other factors have, however, significantly contributed to charting India’s path towards a shining energy-efficient future. The green pivot against the larger climate change battle and more particularly directed at plateauing power sector emissions has been driven by the synergy between Government initiatives, technological advancements, and increasing awareness of the benefits that accrue from RE, more particularly from the solar energy potential that India holds.
When the goals were surpassed (the National Solar Mission that targeted 100 GW of solar power capacity by 2022), more ambitious targets (achieving 280 GW of solar capacity by 2030) were set. The goals were not just spelled out, but guided through a clear roadmap for RE integration vide the declaration of trajectory for Renewable Purchase Obligation (RPO) until 2029-30.
On one hand, utility projects were prioritised through increased tendering and the implementation of the “Development of Solar Parks and Ultra Mega Solar Power Projects Scheme” which accorded approval to 50 solar parks across 12 states. On the other hand, decentralised generation was not left behind- the Rooftop Solar Programme launched in 2014 that aimed to install 40 GW by 2022 was extended to 2026 and has now been complemented by The Pradhan Mantri Suryodaya Yojana. To democratise solar energy access, such decentralised sustainable energy solutions are being actively recognised as complementary means to achieving India’s green energy goals. From one of the largest importers to now one of those witnessing the highest dip in solar-related imports from China, India is well on its trajectory of breaking this manufacturing monopoly, expecting ~ 40GWp of PV manufacturing facilities to be set up by 2025.
The approach towards propelling the nation’s solar implementation agenda has been rather comprehensive and market-driven. Multiple factors seem to have been converging in the market including the emergence of credit-worthy commercial and industrial customers as demand drivers for RE, enhanced financial incentives, tax benefits and subsidies. Standards have been established for the manufacturing of solar PV systems and inputs,
India is strategically aligning itself with global efforts to attain the SDGs, and very deftly so by nudging investments to their right use and their right IRRs. Foreign Direct Investment (FDI) of up to 100 per cent has been allowed through the automatic route, encouraging international investment. The solar sector remains at the forefront given India’s compelling solar potential and the aforementioned factors. However, tackling challenges that crop up in its energy goals’ implementation shall be rendered easy with the adoption of a holistic approach involving collaboration across diverse stakeholders, objectives, policies, and solutions.
(The author is an investment professional and specialises in green financing; views are personal)
