The growth of the Indian solar PV sector has been all but guaranteed by the generous incentive schemes rolled out by the Government, specifically the National Solar Mission. Yet, it being a renewable energy sector, the skeptic deserves his fair share of voice. In this context, the EAI team researched the key challenges facing the growth and development of PV in India. They are:
- Cost and T&D Losses: Solar PV is some years away from true cost competitiveness and from being able to compete on the same scale as other energy generation technologies. Adding to the cost are T&D losses that at approximately 40 percent make generation through solar energy sources highly unfeasible. However, the government is supporting R&D activities by establishing research centers and funding such initiatives. The government has tied up with world-renowned universities to bring down the installation cost of solar power sources and is focusing on upgradation of substations and T&D lines to reduce T&D losses.
- Land Scarcity: Per capita land availability is very low in India, and land is a scarce resource. Dedication of land area near substations for exclusive installation of solar cells might have to compete with other necessities that require land.
- Funding of initiatives like National Solar Mission is a constraint given India’s inadequate financing capabilities. The finance ministry has explicitly raised concerns about funding an ambitious scheme like NSM. Therefore, on may assume that the number of allotments under schemes like the NSM may be limited.
- Manufacturers are mostly focused on export markets that buy Solar PV cells and modules at higher prices thereby increasing their profits. Many new suppliers have tie-ups with foreign players in Europe and United States thereby prioritizing export demand. This could result in reduced supplies for the fast-growing local market.
- The lack of closer industry-government cooperation for the technology to achieve scale.
- The need for focused, collaborative and goals driven R&D to help India attain technology leadership in PV.
- The need for a better financing infrastructure, models and arrangements to spur the PV industry and consumption of PV products.
- Training and development of human resources to drive industry growth and PV adoption
- The need for intra-industry cooperation in expanding the PV supply chain, in technical information sharing through conferences and workshops, in collaborating with BOS (balance of systems) manufacturers and in gathering and publishing accurate market data, trends and projections
- The need to build consumer awareness about the technology, its economics and right usage
- Complexity of subsidy structure & involvement of too many agencies like MNRE, IREDA, SNA, electricity board and electricity regulatory commission makes the development of solar PV projects difficult.
- Land allotment & PPA signing is a long procedure under the Generation Based Incentive scheme
However, none of these inconveniences are very threatening – qualitatively or quantitatively – thus, the deployment of solar PV for commercial scale power generation plants will only go up at this point.