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May 04, 2018

Sector Report: Solar Energy

This report is available to users in India for ₹40,000 + applicable taxes

 

Table of Contents

 

  • Summary
  • Review
  • outlook
  • Project economics
  • Solar Rooftop

 

Summary

 

44-46 GW solar capacity to be added over 2018-22

 

CRISIL Research expects solar power capacity additions to ramp up to 44-46 GW overthe next 5 years (FY 2018-22) as compared to 11.4 GW over the last 5 years (FY2013-2017). The strong growth in capacity additions will be driven by the following:

 

  • NSM: With 3000 MW of Tranche I of NVVN bundling Scheme almost entirelyallocated, Tranche II and Tranche III of a combined 12 GW expected to be allocatedover the next five years. Additionally, central level allocations in solar parks acrossthe country in association with SECI/NTPC continues apace with several allocations,both tendered and upcoming, under Phase II Batch IV. 
  • State solar policies: With thrust from the central government, states have also come out with aggressive targets to be achieved by 2022 under their state solar policies. A total of 4.8 GW is already expected to be added by FY 19 based on tendered allocations and another 4.3 GW is expected to be allocated over FY19 based on upcoming tenders under various state policies. States are facilitating land acquisition as well via solar park allocations in their respective states. Government focus on intra-state transmission is also going to be positive in terms of supporting infrastructure for upcoming capacities. 
  • PSUs: Also, the government is encouraging cash rich PSUs to set up renewable energy projects. In particular, NTPC has already commissioned a total of over ~870 MW of capacities and has tendered another 241 MW. Similarly, Indian railways has committed to 5 GW of solar power by 2025. Other PSUs such as NHPC, defense organizations and governmental establishments are also expected to contribute to this addition. 
  • Rooftop Solar projects: We expect ~8 GW of rooftop projects (under CAPEX and OPEX mode) to commission by FY 2022 led by high industrial and commercial tariffs and lower levelised cost of energy for solar rooftop projects. Further, the  capacity additions would be supported by improvement in the discoms infrastructure, continuation of net metering regulations/benefits and other regulatory incentives.