Reality Check: Indian Renewable Targets Reset

The Ministry of New and Renewable Energy (MNRE) recently announced the capacity addition target for solar power in the financial year 2019-20.

India aims to add 8.5 gigawatts of solar power capacity between April 2019 and March 2020, including 1 gigawatt of rooftop solar power capacity.

The target is 23% lower than that set for the previous financial year, 2018-19.

The sharp decline in target for 2019-20 seems to indicate that the government, too, has recognized the challenges faced by project developers, even in those cases where projects have already been auctioned and allocated.

The Solar Energy Corporation of India (SECI) reduced the size of several solar power tenders, delayed others, and cancelled 2.4 gigawatts of capacity in the country’s largest solar power tender ever.

Similarly, the state of Gujarat cancelled solar power auctions multiple times over the last few months.

Such actions have led to developers not participating in solar (as well as wind) power auctions altogether.

India has set a goal to have an operational solar power capacity of 100 gigawatts by March 2022. With just 34 months left to achieve that target, India must add over 71 gigawatts, at an extremely aggressive monthly average of 2 gigawatts.

With the return of the Modi government in recently concluded general elections, SECI is expected to issue a large number of solar power tenders and also work with state governments to hasten process of land acquisition.

However for now in the face of lingering issues of land acquisition, uncertainty over taxes and import duties and slowdown in overall economic growth India has reduced its solar power capacity addition target to the lowest level in four years.

Reference- Clean Technica, SECI PR, PIB PR