Fate of Indian Solar industry in 2018

The Indian solar industry could show another record breaking year with more than 10 GW of solar capacity expected to be installed this year. Almost 4 GW of solar projects were installed during the first two quarters of the year and based on the construction, one 12 GW and another 6.5 GW seem well on its way to being installed. However, 2018 will bring new major challenges with the industry facing new and old issues:

1)      Distribution utilities across the nation are in a situation of power surplus and do not want to sign PPAs with any power developer whether its fossil fuel or solar energy

2)      Anti-dumping duties on imports of solar equipment will raise the prices of power and deter investment with uncertainty growing

3)      Familiar problem of discoms not paying on time and facing financial issues

Also, read India Has The Cheapest Solar System Prices In The World, Even 20% Below China

4)      Some developers have bid too aggressively in recent auctions and could face viability issues going forward leading to a potential industry slowdown. Acme which was the winner of the INR 2.46/kWh bid is already seeing distress as solar panel prices have increased in the last two months and is being reported to sell its plant to somebody else

5)      Escalation in solar panel prices as demand has increased in China and USA leading to higher prices in India

The long term future of the solar industry in India is in no doubt, given its low cost. India has the lowest capital cost for solar projects in the world with a price of just 70 cents/watt thanks to its super cheap labor, capital equipment, and project management costs. However, in the short term, the industry may face a cyclical slowdown as the overall power sector faces a situation of surplus.