The year gone by was certainly significant for the Indian renewable energy sector as the key indicators reflected a growth of two to three times in 2016. The country added around 4.9 GW of solar capacity, a 101 per cent increase over 2015, and crossed the 10 GW cumulative installed capacity mark. The rooftop solar segment crossed 1 GW in September 2016, a 135 per cent jump over 2015. And the wind power segment witnessed a capacity addition of 3.6 GW, which is a 36 per cent increase over the preceding year.
The key developments of the year include the implementation of solar parks and rooftop schemes, the introduction of the Solar Cities Programme, approval of the repowering policy, the issuance of new renewable purchase obligation (RPO) targets and the launch of the competitive bidding scheme for wind power project allocation. Technology developments related to solar-wind hybrids, higher efficiency wind turbines and innovative mounting structures set the ground for improved project economics.
Given the aforementioned policy and regulatory initiatives as well as the technological developments, the year 2017 holds a lot of promise for the sector. As such, the industry is likely to witness several exciting trends in the coming years.
Energy storage will emerge as one of the most crucial components of the country’s energy infrastructure strategy given the government’s push to have 160 GW of wind and solar PV capacity by 2022. Storage would be a key factor in handling the issue of variable power.
In the solar power space, the industry is gearing up for the largest rooftop solar tender of 1 GW released by SECI and many more large-scale tenders announced by various state nodal agencies. Driven by the declining cost of solar power and the need to meet RPOs, industrial and commercial users are likely to drive growth in this space.
While solar has taken centre stage, the wind power segment is expected to receive a big push if the proposed competitive bidding mechanism proves successful in bringing down the cost of wind energy. Solar-wind hybrids too are likely to gain traction during the year with the government setting a tentative target of 10 GW by 2022 through this model.
All these developments call for a higher need for finances. Given that the conventional sources of financing have limited scope, newer mechanisms such as credit guarantee schemes, green bonds, equity participation by module suppliers/EPC contractors, solar park financing vehicles, community pooled projects, securitisation and crowd funding are likely to gain momentum.
Overall, the sector is headed for exciting times.