Date November 18, 2014 – 7:56AM Debjit Chakraborty and Ganesh Nagarajan
Solar park in Gujarat, home state of India’s new prime minister Narendra Modi.
India said its renewable-energy industry must eventually learn to live without government support and that it’s seeking to generate five times more power from solar by 2022 than is currently installed.
Renewables need to be a “self-sustained industry and not dependent on government subsidies,” Coal and Power Minister Piyush Goyal said in an address at an event in New Delhi today. The government is targeting 100 gigawatts of solar capacity in the next eight years, putting India’s ambition for photovoltaics on par with China’s, he said.
India may find it difficult to achieve its solar target without subsidies as the country has added only 3 gigawatts so far and the previous government was talking about adding only 20 gigawatts.
The country wants to attract $100 billion ($115 billion) of investment in clean energy over the next five years. Companies and lenders say that will require a shift in policy from India’s current auction-based system, which caps installations to control the scale of solar fitted and the amount of subsidy payments incurred. India led the world in competitive bidding — followed by Brazil and South Africa — which helped push down the cost of solar power by about half since 2010.
“The solar target is very ambitious,” said Bharat Bhushan Agrawal, a Bloomberg New Energy Finance analyst. “There will be transmission and other infrastructure constraints to contend with. The power market will also need reforms if the share of subsidy has to be reduced and more private participation is sought.”