Targeting to join the global green bandwagon, the Indian Government had in January, 2010 launched the Jawaharlal Nehru National Solar Mission (JNNSM) with an aim of installing 20 GW of solar electricity by 2022. The first phase targets were of the order of 1000 MW by 2013, the second phase targets were set to be about 4000 MW by 2017, and in the third phase the targets were set to be of the order of 20000 MW.
The first phase which itself has observed remarkable attention of both domestic and global investors and government, is expected to achieve its targets soon. In fact the current installations in the country are of the order of 950 MW and some of the states such as Gujarat have already achieved an installation of about 650 MW, which is the single largest concentrated installation of grid connected PV systems in the world.
Globally, especially in Europe, solar PV installations are experiencing a slow down. This has been positively countered
Figure 1: PV Installations in the world the 1000 MW (Source: For above graph – Global Market outlook – for photovoltaics until 2016; EPIA)
by the surge in interest in the Indian markets, which have now emerged as a hotspot for global investments in the PV market. This sudden interest has made the India the eighth largest solar market in the world.
The growth in Solar PV in India and its rise as a global market has kept open a multitude of observations and lessons to be learned, which are further explored in the following sections of the article.
In 2011 the total solar PV installed capacity was of the order of 120 MW, and a handful of companies used to operate in this niche sector. However now the volumes are increasing and it is important to handle this growth through a systematic approach.
In 2011 the total solar PV installed capacity was of the order of 120 MW, and a handful of companies used to operate in this niche sector. However now the volumes Figure 2: Solar PV Installed in India as on May 2012 (Source: Firstgreen Consulting Pvt Ltd – Data Compilation)are increasing and it is important to handle this growth through a systematic approach.
India has seen significant growth in renewable, especially in wind power and over the last decade, it has become a global hub for wind power with an installed capacity of the order of 17 GW. A similar growth pattern is anticipated in solar as well.With the increased focus on installing solar electricity, which is still an expensive form of electricity as compared to grid electricity, it is important to recognize the additional costs involved for its adoption in short and medium term until solar electricity achieves grid parity.
So far India has promoted renewables through its feed in tariff (FIT) policies with the wind energy sector enjoying FITs for over a decade. On similar lines solar started initially through the FIT route under the MNRE support schemes in 2007 in which a Generation Based Incentives (GBI) was provided to the solar projects developers from Central Government to meet the viability gap.
The states offered a tariff of the order of about 3 Rs/unit and about 12 Rs/unit GBI was provided through Central Government. Soon after the launch of JNNSM in 2010, the solar market was shifted to the competitive bidding route and large volumes of solar installations were observed under this mission. The large volumes in Indian market led to its own price discoveries and in the recent prices under JNNSM have reached about 7.5 Rs/unit, which shows that market is ready to offer a discount of almost 50% on the base price determined by CERC for solar electricity.
Figure 3: Installations of solar PV power projects JNNSM Phase I (Source: Firstgreen Consulting Pvt Ltd – Data Compilation)
Gujarat and Rajasthan took a lead role in facilitating solar installations and initiated support schemes for solar developers in the form of single window clearances through their respective nodal agencies in order to fast track installations.
Moving on to a larger scale. states have also procured land and developed it in the form of a solar park, with basic facilities such as power evacuation, facilities etc. During JNNSM phase I’s first trench of 150 MW out of 30 projects of 5 MW each, about 21 projects were installed in Rajasthan only. Similarly in the second trench of 350 MW, Rajasthan was considered as the preferred destination by the developers with a total capacity installation of about 305 MW. Also in case of Solar thermal, the developers considered Rajasthan as the preferred destination and out of first phase of 500 MW of solar thermal development, 430 MW of Solar Thermal installations are underway in Rajasthan.
Figure 4: Installations of solar thermal power projects JNNSM Phase I (Source: Firstgreen Consulting Pvt Ltd – Data Compilation)
The state governments, too, on their part have come up with their own solar policies and adopted a similar process of reverse bidding as being done by NTPC Vidyut Vyapar Nigam (NVVN).
While solar market is on a high growth path, the Government is facing a whole new set of challenges in further developing the country’s solar market.
- How would the Government handle new requests for connections?
- How to ensure a quality supply of solar electricity to grid?
- How to handle the variable nature of solar electricity in the grid, and manage the integration of solar electricity which is intermittent in nature?
- How to manage concerns over usage of agricultural land for solar installations?
A host of other new challenges have also lined up which need to be addressed. The first and foremost being the experience level of developers. In some cases, projects have been allotted to incompetent and inexperienced developers which may lead to delays in commissioning.
Another question that arises is how should the technology for PV be integrated, particularly inverter technology, where harmonics are a great concerns and this may lead to the grid system instability.
While already efforts are underway to address some of these concerns, a greater concern is to control the cost of this electricity as significant growth of solar in the country’s electricity portfolio will surely impact the electricity prices to the end users and government has its limitation on the incentives to be provided to the solar developers.
Connecting solar projects to the grid is also a great challenge. While solar plants come up in a period of six months; it takes more time even in strengthening the transmission network. Also there is a need on focusing on smart grid technologies to align solar electricity in the grid. At times while we are focusing on the new capacity additions there is an urgent need to focus on the network related issues for a sustained growth of solar electricity in the country.
While there is a likely addition of about 4000 MW of solar electricity in short term and about 20000 MW of solar electricity in long term by 2020, we need to address the following issues on urgent basis:
1. Large scale deployment of solar in the Indian grid system will lead to the system instability. There is a need to develop better forecasting capabilities, both at the generation side as well as on the load side.
2. Developing smart grid infrastructure so that there is a two way communication between the grid and the PV inverters. Developing a smart grid infrastructure will pave the way for better harvesting the solar electricity in to the grid.
3. Rooftop PV systems may look much more attractive due to the fact that these systems have potential to reduce transmission and distribution losses abd reduce additional burden of laying the T&D infrastructure. However, the utilities do not have sufficient metering infrastructure to integrate the roof top systems in the main grid.
4. Energy storage is most viable solution for a firm output of a variable resource like solar. There is a need to develop the MW scale energy storage capability and the electricity vehicles can also address this need.
5. Despite the cost of solar PV coming down to almost Rs 8 Cr./MW, solar electricity still remain uncompetitive with other renewables. As per the recent Prayas group report, achievement of 1000 MW under the first phase of the NSM puts additional burden to the consumers of the order of Rs. 5400 Cr. It is important to consider that there is an optimal utilization of public funds. As per the report the same amount can be used for effective distribution of two lanterns to the 72 Million households.
6. The current RPO regime mandates all the states to take up solar RPO targets, even though they may or may not have solar power potential. Those states which do not have a potential have to procure either certificates or trade solar electricity through other solar resource rich states. There is a need to bring out clear guidelines for interstate solar electricity transmission, open access guidelines, wheeling and banking guidelines to smoothen the implementation of RPOs in the resource lean states.
7. Solar installations are remote and need long transmission lines from the substations and main consuming stations. There is a need to strength then the transmission network to absorb the solar electricity.
8. With rapidly decreasing or changing costs of solar PV, it has been extremely difficult to set feed-in tariff s. Although the states have now gone for a competitive bidding process to determine the feed in tariff and discovered tariffs as low as 7 Rs/kWh, these tariffs may not bring the quality installation of PV systems. The low cost installation may lead to dumping of sub-standard technologies in the country.
9. Solar PV has already become attractive proposition for decentralized off -grid installations where the central electricity grid is non-existent or unreliable and DG electricity is used as a backup electricity source to the extent of 50% of the total supply. There is a need to promote this industrial off-grid installation through extending the REC benefits to these off grid consumers of solar electricity.
10. Although there are guidelines for domestic content requirement under the NSM for CSi technology, however there is a need to assess the comparative advantages of domestic v/s importing the modules at a fair price.