Solar sector in India: Opportunities and Challenges

The government has played a significant role in promoting the solar sector in India by setting up ambitious targets, encouraging project developers, streamlining regulatory framework and driving down costs over the years. Large scale solar projects have different issues than distributed solar projects and these issues would require a serious and concerted effort by the Government and government agencies. Hence, the only real mechanism to tap solar power for the benefit of people at large is distributed solar power. It is essential that there is a robust and streamlined policy and regulatory framework to allow capacity ramp up and large scale deployment of distributed solar power.

Rooftop solar is naturally insulated against market related risks (including land acquisition, SEB health and evacuation capacity). In fact, despite relatively higher capital costs, rooftop solar systems are a cheaper source of power vis-à-vis grid power for Commercial & Industrial users making it an economically viable alternative for these power consumers. Although the government is highly progressive and has taken several measures to strengthen the regulatory framework for rapid development of the sector, the ecosystem is still at a developmental phase. In order for the distributed (rooftop) segment to scale up, it requires the following enablers:
• Support from the regulators in terms of clear net metering policy guidelines;
• Demand side pull in terms of enforcing renewable purchase obligations (RPOs)
• Grid infrastructure of the distribution companies to accommodate banking;
• Non-recourse financing for rooftop projects from financial institutions;
• Mandating large consumers to set up solar rooftop systems;
• Providing REC benefits to rooftop solar projects; and
• Waiver of electricity duty and other charges etc.

Bridge to India expects the sector to reach a total capacity of 12.7GW by 2021 (
The rooftop solar market in India has grown at a compound annual growth rate of about 90% in the past two years, while the cost of installing rooftop solar has fallen by 12% per annum for the past four years.