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August 17, 2018

CRISIL Research Sector Round-up: Robust solar allocations and a duty scare

Government push comes with a catch

CRISIL Research expects solar power capacity addition to ramp up to 56-58 GW between fiscals 2019 and2023, compared with 20 GW between fiscals 2014 and 2018. This will be driven by capacities allocated/tendered under the National Solar Mission, state solar policies, other schemes driven by SECI (ISTS, winsolarhybrid etc.) and PSUs. Additionally, even though 7-8 GW of capacity additions are expected undersolar rooftop over the same period, the pace of growth for the sector is going to fall behind the overall targetset for it.


We expect some delay in project implementation on account of the duty as the ‘change in law’ clause isexpected to be sought for ~12 GW of under-construction projects. Logically, domestic modulemanufacturers would become the main suppliers to solar developers in India. However, their supplycapacities are far short of the annual demand of the sector. Hence, we expect a rise in capital costs overthe near-term due to the duty. Additionally, in light of falling module prices, the impact of the duty remainsto be seen.