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India's solar equipment sector set for Rs 1 trillion investment: CareEdge
Industry News- Dec 21,24
To protect and empower domestic manufacturers, the Indian government has implemented a Basic Customs Duty of 25% on solar cells and 40% on modules imported from China since April 2022.
India's solar equipment manufacturing industry is on the cusp of unprecedented growth, with capital investments projected to soar to nearly Rs 1 trillion over the next two to three years, according to a report by CareEdge Ratings. This surge includes an estimated Rs 700 billion in debt funding aimed at expanding polysilicon and wafer production capacities.
As of September 2024, India’s renewable energy capacity reached an impressive 155 GW, with solar power dominating at 91 GW. This milestone is the result of years of consistent capacity additions and a robust policy framework fostering solar energy’s rise. The CareEdge report projects that annual renewable energy installations will surpass 35 GW in the next two years, supported by a pipeline exceeding 100 GW.
The expansion is bolstered by a government tendering target of 50 GW of renewable energy annually, with solar expected to take centre stage. Rooftop solar, hybrid systems, and off-grid installations are anticipated to contribute an additional 20 GW of capacity in the medium term.
To protect and empower domestic manufacturers, the Indian government has implemented a Basic Customs Duty of 25% on solar cells and 40% on modules imported from China since April 2022. This move aims to reduce dependence on Chinese supply chains and strengthen local production.
Jatin Arya, Director, CareEdge Ratings, noted that the sector benefits from robust domestic demand, favorable policies, and export opportunities. However, challenges remain, including insufficient integrated solar equipment capacity, competition from global players, and delays in renewable energy projects due to systemic hurdles.
India’s solar expansion aligns with its ambitious climate goals outlined at COP26 in 2021. These include achieving 500 GW of non-fossil electricity capacity, fulfilling 50% of its energy needs through renewables by 2030, and reaching net-zero emissions by 2070. Additionally, the country aims to reduce emissions intensity of GDP by 45% and cut emissions by 1 billion tonnes by 2030.
India's solar journey reflects a strategic pivot from traditional fossil fuels to renewable energy, positioning the nation as a leader in global efforts to combat climate change. With substantial investments, policy backing, and a clear vision for sustainability, India is poised to transform its energy landscape while contributing to global climate action.
(KNN)
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