With a population of close to 1.4 billion and a fast-growing economy with enormous potential to grow, India’s energy mix in future years will be critical for the climate action targets of the world and India itself. India is already the third-largest energy-consuming economy after China and the United States. In this backdrop, India’s solar energy targets are discussed widely for its ambitious targets, the strategy to achieve it, and the gap between current status and required efforts. The debate came to the fore once again when the Prime Minister in recently Inaugurated a 750 MW solar project in Rewa district Madhya Pradesh.
India has set its sights on exporting solar power as it seeks to expand its non-renewable energy sector. However, there are still significant challenges that need to be overcome to achieve this goal.
The government has decided to impose 40% basic customs duty (BCD) on solar modules and 25% on solar cells from 1 April 2022, in a move that would make imports costlier and encourage local manufacturing.
“Solar panel prices have increased to around 28-30 US cents per watt from around 20 cents in late 2020 due to increased inputs costs for polysilicon, photovoltaic glass and freight costs,” said Abhishek Dangra, senior director, infrastructure sector lead at S&P Global Ratings.
“We expect solar panel prices to remain firm in 2022 in India reflecting international trends,” Dangra said.
One of the challenges that India faces is the high customs duty on Chinese components. These components are essential for the production of solar panels, and the high duty makes it difficult for Indian manufacturers to compete with Chinese companies, which dominate the global solar industry.
Another challenge is land acquisition. India needs vast amounts of land to set up solar power plants, and acquiring this land can be a lengthy and challenging process. Moreover, there is often resistance from local communities, which can further delay the process.
Despite these challenges, the Ministry of Non-Renewable Energy has announced plans to export solar power. By 2026, India aims to have an industrial capacity to manufacture solar modules that can generate 100 gigawatts of power every year. This move is a significant step towards achieving the country’s goal of producing 175 gigawatts of power from non-renewable sources by December 2022. So far, India has only achieved 122 gigawatts of this target, and for solar energy, the target was 100 gigawatts, of which only 62 gigawatts have been installed.
Exporting solar power could have many benefits for India. It could help the country to earn foreign exchange, reduce its dependence on fossil fuels, and combat climate change. However, to achieve this goal, the country must address the challenges it faces in the non-renewable energy sector.
India’s plans to export solar power are a positive step towards a more sustainable energy future. However, the country must address the challenges of high customs duty on Chinese components and land acquisition to realize this ambition. With the right policies and investment, India has the potential to become a global leader in renewable energy and make significant progress towards a greener future.
