India being a large country receiving ample of sunlight is a good market for investing on solar energy. Due to the favourable policies initiated by the Indian government and commitment, the SIZ industry in India is becoming hot destinations for domestic and global investors. The below article provides a basis of the research to Indian Solar market and identifies potential investment opportunities.
Government Initiatives and Policies
More so, Indian government has been very active in the promotion of the generation of solar energy. The National Solar Mission launched in 2010 installed plans to make India a world hubs in solar energy. The target of mission has been changed in 2015 to installed capacity of 100 GW by the year 2022 it clearly shows the commitment of government towards renewable energy. The target on it comprises 40GW Roof Top Solar Plant and 60GW Large and Medium Integrated Grid Solar Plant.
Market Growth and Potential
Since the solar power has registered a phenomenal growth in India. According to the data collated as on December 2023, India has commissioned about 60 GW of solar power as against only 2.6 GW in 2014. This growth is due to policy promotion, the continuous decreasing of the cost of solar PV systems and much more investors paying attention to this industry. According to the IEA estimates, India could reach about 255 GW of solar power by 2040 which will make the country one of the largest solar markets of the world.
Financial Incentives and Support
The participants in the Indian solar market avail themselves of various financial rewards and aid arrangements. Through entre investment incentives the government has provided tax holidays, accelerated depreciation benefits, and viability gap funding to lighten investors’ burden. Also, several state governments provide the land at concessional rates, which cut down on the initial investment.
Technological Advancements
The solar market has been helped greatly by technological improvement. From this point of view, the price for the solar PV modules has escalated consistently through the past decade by more than 80% compared with the conventional energy sources. There are ongoing advancements in energy storage, the integration of systems to the power grid as well as improvement in the efficiency of the solar panels. For instance, application of thin film bifacial solar panels that harvests light on the dual sides of the panel has emergence in this category due to increased energy production and optimized land utilization.
Investment Opportunities
Utility-Scale Solar Projects: Among these, large scale solar farms are in demand as an area of investment. Due to the fact that several projects are tendered by agencies of the central and state government, there are good prospects for investments upstream to bid on projects. The SECI tends to announce large capacities, which makes it clear and consistent when it comes to investment.
Rooftop Solar: There has been a tremendous future opportunity for rooftop solar segment. There are investment opportunities for investors due to government’s ambition for 40 GW from rooftop systems, based on residential, commercial and industrial applications. Rooftop solar is profitable due to net metering policies and subsidy.
Solar Manufacturing: The local manufacturing of various solar equipment is also promoted through the “Make in India” program. There are good returns to be made from the Solar PV manufacturing such as solar cells, modules, and other parts affiliated to them. The government has just extended its Production Linked Incentive (PLI) programme that essentially increases the incentives for home production.
Energy Storage Solutions: The problems of variability that is characteristic of solar power is solved by incorporating energy storage into solar projects. Promising is the investment in battery storage technology or any technology of the lithium ion variety. The government’s advocacy for electric vehicles (EVs) also accord with the thrust for energy storage options.
Challenges and Mitigation
The subject Indian solar market offers numerous opportunities, Q But the investors interested in it should be preparing for such challenges as the problem of land access, regulatory barriers, and grid problems. These risks can be managed by engaging local firms for partnerships and collaborations, having direct contacts with the legal authorities and other government departments, and by investing into smart grid technologies. Thus, it can be summarised that India solar market has vast opportunities due to favourable government policies, technology innovation and growing need of renewable energy among the country’s consumers. Hence if a savvy investor wants to carve a niche for itself in the Indian market, they could do so by identifying the right opportunities that would help them secure high returns as also simultaneously complement the country’s thrust towards the creation of sustainable power.
Ravi Kumar
The author is a founding team member and Vice President (VP) of Oorjan Cleantech (https://www.oorjan.com). Oorjan is co-founded by IITians and ex-bankers and is one of the fastest-growing solar companies in India.
