India set to become fourth-largest solar market in 2016

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Beating three major European markets, the UK, Germany and France, India is all set to emerge as the fourth-largest solar market in the world this year with an expected capacity addition of 5.4 GW in 2016. “India is poised to become the fourth-largest solar market in 2016, leaving behind three major European solar markets with expected new capacity addition of 5.4 GW in 2016,” consulting firm Bridge to India said in its latest issue of India Solar Handbook report.

A rapid reduction in costs and increased demand for solar installation has triggered tremendous growth over the past 12 months in the country’s solar energy sector. About 65 GW of solar capacity is expected to be added globally in 2016, with Asian countries in the lead, the report said. India has already installed 6.6GW of utility-scale solar capacity and 740 megawatt (MW) of rooftop capacity.

“The southern market would be saturated in 2-3 years so the challenge is to see where the medium-term demand for solar power comes from. Uttar Pradesh and Maharashtra will need to increase solar power development,” said Vinay Rustagi, Managing Director, Bridge To India. Mr Rustagi also predicts that a trend is going to emerge wherein developers with projects on the ground start to sell their plants in order to participate in future tenders.

At the same time, a majority of chief executive officers in the Indian solar power industry expect the country’s solar power generation capacity to reach only 57,000 MW by 2022, significantly lower than the government’s target of 100,000 MW, according to a survey of CEOs of 31 firms in the solar power industry conducted by Bridge To India. “Our estimates show that unless challenges like transmission and financing are addressed urgently, the industry will miss the targets by big margins,” Mr Rustagi said.

However, the survey shows that the industry is very buoyant about sector growth prospects and expecting a new capacity addition to increasing from a stagnant 1 GW per annum to about 6-8 GW per annum going forward. The industry is also very positive about the prospects of domestic manufacturing and expecting an annual cell-module manufacturing capacity of 5 GW by 2022.

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