India Solar Energy Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

India Solar Energy Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The solar energy market in India is expected to grow at a CAGR of more than 8% during the forecast period. The Covid-19 impact has not much affected the solar energy market in the country, as growth was witnessed in the solar PV installed capacity in the year 2020, in comparison to 2019. The cumulative growth in the electricity generation by solar energy sources also got accelerated in the year. Major factors driving the Indian solar energy market are the declining cost of solar power technology, the flexibility of these systems, and a greener method of power generation. However, the solar energy market is also hampered by issues like T&D losses (Transmission & Distribution losses), and unpredictability in the continuity of power supply.

Key Highlights

• The solar PV segment is expected to dominate the Indian solar energy market during the forecast period, as now they are extremely cheaper than other solar technologies and include a simplified installation procedure.
• India has an abundance of solar irradiance and receives solar energy throughout the year. This has created umpteen opportunities to exploit solar energy from the sunniest sites in the country, especially Rajasthan, Gujarat, and Andhra Pradesh. The factor mentioned above, clubbed with foreign investment and extensive R&D projects to improve the technology provides ample opportunities for the growth of solar energy market in India.
• The market is also propelled by supportive government policies, particularly the plans formulated by Ministry of New & Renewable Energy (MNRE) to encourage renewables-based power generation.

Key Market TrendsSolar PV segment Expected to Dominate the Market

• The Solar PV market is likely to have the largest market share during the forecast period, due to falling costs of solar modules, and the versatility of these systems for various applications like electricity generation, water heating, and a few others.
• According to the International Renewable Energy Agency (IRENA), the installed solar PV capacity in India was around 38.98 GW in 2020, up from 34.86GW in 2019, recording a growth of around 11% in the year. The growth is the result of huge deployments of solar PV installations in India, particularly for utility projects. The government of India still has more plans to have more solar PV installed capacity in place.
• In December 2021, MNRE invited applications for Expression of Interest for conducting the evaluation study of Phase-II of Grid Connected Rooftop Solar Programme. The programme is a part of the National Solar Mission which aims at installing 40GW capacity of grid-connected solar rooftop installation systems by the year 2022.
• In January 2022, Reliance Industries(RIL) signed a pact with Gujarat government to invest Rs 5 lakh crore in the state over the span of 10 to 15 years to set up 100 GW renewable energy power plants and green hydrogen eco-system. The renewable energy power plants include solar power plants at utility scale. RIL is expected to invest Rs 60,000 crores in setting up of manufacturing facilities for solar PV modules, electrolyzers, batteries, and fuel cells for the upcoming renewable projects
• Owing to the above-mentioned developments, the solar PV segment is expected to have the largest market share in India during the forecast period.

Supportive government policies to Drive the market

• The solar power share in the renewable power generation mix of India was recorded as 58.7 TWh, as of 2020. The country has envisaged various government initiatives in the recent years to increase this share of solar energy in the near future.
• In April 2021, MNRE approved a Production Linked Incentive (PLI) Scheme, namely, ‘National Programme on High-Efficiency Solar PV Modules’, with an investment of Rs. 4,500 crores. The scheme has various provisions for supporting the set up of integrated manufacturing units of high-efficiency solar PV modules by offering Production Linked Incentive (PLI) on sales of such solar PV modules. It aims at enhancing domestic manufacturing capabilities and exports for years to come.
• Some other schemes implemented by the Ministry of New and Renewable Energy (MNRE) in the last three years are the Solar Park Scheme, the 300MW defense scheme, and the 500MW of VGF (Viability Gap Funding) scheme. In January 2020, India again boarded on an ambitious target of having 450 GW of renewable energy by 2030. The announcement was made by the central government, which is already working on the project of installing around 100GW of solar energy by 2022.
• In December 2020, the Gujarat government implemented “the Surya Urja Rooftop Yojana” scheme, that aimed at installation of solar rooftops for 8 lakh residential consumers by March 2022. Under this scheme, 40% of state subsidy will be provided on installation of systems up to 3 kW and 20% subsidy for 3 kW- 10 kW systems.
• All these developments are likely to give a boost to the solar energy market of India in the coming years.

Competitive Landscape

The solar energy market in India is fragmented. Some of the major companies operating in the market include Adani Enterprises Ltd, Emmvee Photovoltaic Power Private Limited, Azure Power Global Limited, JinkoSolar Holdings Co. Ltd, and First Solar Inc. among others.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
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