According to reports, India is projected to add 2,500 MW solar power generation capacity this year as the country’s solar market is set to “take off”, says a report.
Upgrading its earlier forecast for 2015, Mercom Capital Group today said the country is on target to become one of the top five solar markets over the next five years.
In May, the group had projected solar generation capacity addition at 2,500 MW for this year.
The forecast for solar installations in India for 2015 now stands at about 2,500 MW, it said.
“Solar installations year-to-date is approximately 1,400 MW. Cumulative solar installations in India have now crossed 4.5 GW (4,500 MW),” Mercom said in a statement.
Mercom Capital Group Co-Founder and CEO Raj Prabhu said that after a long wait, India’s solar market “is finally taking off”.
The government has raised the installation target under the national solar mission from 22 GW to 100 GW by 2022. Out of the revised target, 60 GW would be large-scale projects and the rest would be through rooftop ones.
“Year-to-date installations of 1.4 GW (1,400 MW) already make it the best year for solar in India. The Indian solar market is finally on target to be one of the top five markets in the world over the next five years,” Prabhu said.
According to Mercom, a global clean energy communications and research firm, one bottleneck in the domestic solar market is related to release and allocation of cess funds.
Clean energy cess is being levied on domestic as well as imported coal and these funds are to be used for clean energy development.
As per Mercom, almost 60 per cent of collected cess has not been transferred to the National Clean Energy Fund (NCEF).
“Total funds allocated to Ministry of New and Renewable Energy (MNRE) to date is just 19 per cent of funds collected. In the last two years, approximately 55 per cent of the NCEF fund allocation has gone to MNRE while 45 per cent has been allocated to ‘Namami Gange’ river cleaning and miscellaneous projects,” the statement said.
About $3 billion (around Rs 18,900 crore) in unused money in the NCEF can be used productively to create a reserve backstop fund’ against late payments that would reduce offtaker credit risk, stimulate lending activity, and help lower interest rates, Prabhu noted.