Solar Capacity Addition Exceeds Demand: Report

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India’s power demand growth may not keep pace with the expansion in solar energy capacity, which may slow down capacity addition from the renewable source in 2018 before it recovers in the following year, consultancy Bridge to India said.

In its latest handbook on solar energy, it estimates that solar capacity addition will be a record 7.7 GW (gigawatts) in 2017, but will fall to 6.5 GW the following year. It will recover to 7.5 GW in 2019 , before scaling new heights of 8 GW in 2020 and 8.3 GW in 2021.

Two years ago, India set itself an ambitious target of adding 100 GW of solar capacity by 2022. So far, until endMarch 2017, 12.3 GW had been installed, including 5.5 GW in 2016-17. However, Bridge to India has forecast that even if its projected yearly targets are achieved, India will have only 44 GW of installed solar capacity by end-2021.

“The pace of new tender announcements and completed auctions has slowed down significantly in the last year,“ says Vinay Rustagi, managing di rector, Bridge to India.

In the previous year, Andhra Pradesh, Telangana and Karnataka have been the most proactive states in installing solar power. “Southern states have frontloaded capacity build out and are bound to slow down,“ he adds.“Amongst other large states, Maharashtra and Gujarat, like many others, remain unenthusiastic to new solar power.“ The steep fall in solar tariffs at auctions held over the past two years has been welcomed, but it has also had unexpected side-effects. “Greenfield solar power at prices of `3.03.5 per kWh are very attractive and should create strong demand pull in the medium-to-long term,“ says Rustagi .

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