India to instal 100 GW solar capacity

The Indian power minister recently said that the Indian government is going to raise its solar energy target dramatically from 20 GW in 2022 to 100 GW. This is a massive target increase. To give some context, the total global solar capacity installed by 2013 was 100 GW. This means in less than a decade, India will be trying to install the entire world’s capacity. This will require not only massive investments almost $150-200 billion in generation alone, but also billions of dollars in strengthening transmission and distribution. It will also require major policy changes to remove the bureaucratic hurdles.

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The government is also planning to train thousands of people in solar energy technology installations. It plans to use the industrial technical institutes to train people and has already started a separate ministry to look after skilled manpower development. India is expected to install just 700 MW of solar power this year. This means a 15 fold increase, which will mean that the industry and government will have to really ramp up the efforts.

I don’t think 100 GW is a feasible target, but even if India does half of that it will be a good achievement. What could really help is another sharp cut in solar power costs. Solar power installation costs have already fallen by more than 50% in the last 5 years as scale has increased, industry has matured and cell efficiencies have improved. While everyone expect the costs to keep declining such that solar power would become competitive with coal by 2019 (globally), a sharper fall in in prices could lead to dramatic increase in capacity installations.

This means good times for both industrialists as well as entrepreneurs. There will be huge opportunities in the installation space, as distributed solar creates much more employment and profit opportunities for smaller players.

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The government is planning to train around 50,000 people in areas related to solar power—a so-called solar army that would help India achieve ambitious targets in harnessing the power of the sun. The workforce will be trained through organizations such as the industrial training institutes (ITIs) under the government’s national skill development mission. While India has a solar generation capacity of 2,900 MW, the National Democratic Alliance (NDA) government has substantially revised an earlier target of achieving 20,000 MW capacity by 2022 to 1,00,000 MW. This would require an investment of around Rs.6.5 trillion over five years. “For us to achieve this ambitious target, there will be a requirement of land, labour and capital. This 50,000-strong solar army will be provided three to six months training in the solar energy related areas, which will also prepare them for the job opportunities that the sector will have to offer,” a government official said, requesting anonymity. “On the other hand, they will help meet the sector’s demand for a workforce.”