Fitch Sees Strong Long-Term Growth for Solar Sector in India

Despite the headwinds impacting module supply and solar deployment, India’s solar market is expected to emerge from a slow 2023 with significant growth and feel the benefit of the country’s protectionist domestic manufacturing policies.

Analysis from consultancy Fitch Solutions has said that the difficulties faced with module supply and an insufficient domestic manufacturing base are set to pass in the long term as legislation is set to catalyse the rooftop market and more manufacturing capacity comes online.

Indian firm JMK Research and Analytics said that the country installed around 11GW of utility-scale solar PV in 2022, whilst Fitch Solutions said that the total installation of all solar PV in the country in 2022 was 12.8GW. Though this was larger than installations in 2021, it was 30% lower than the national target for the year.

The country’s basic customs duty (BCD) and Approved List of Models and Manufacturers (ALMM) programmes meant that module imports from China nosedived whilst domestic manufacturing capacity lagged behind in picking up the slack.

The research from Fitch said that the rooftop solar sector is set to grow in the coming years after the Ministry of New and Renewable Energy (MNRE) extended its rooftop solar programme to 2026. The extension is because of 2022’s failure to meet its targets, and despite impressive growth in recent years the Indian rooftop market still accounts for a less significant market share than in many other countries with comparable renewable energy targets.

(ieefa.org, January 13, 2023)

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