this will require debt to the tune of Rs 3.5-4 lakh crore.
Promoters will bring in additional Rs 1-1.5 lakh crore,”
the RBSA report further added.
Going forward, grid infrastructure and equipment
manufacturing would require additional capex of Rs 7-8
lakh crore, which is challenging for the sector.
The debt restructuring and the increase of stressed
loans in the sector is also a major concern, especially at a
time when the Indian banking sector is going through
its own challenges. This will make borrowing much
more difficult in the short-term.
According to the Reserve Bank of India (RBI) data,
bank loans worth Rs 7 lakh crore (about $103 billion)
were under stress as of the end 2015.
Many solar manufacturers like IndoSolar, Moser Baer
have already recorded loss and are going for debt re-
structuring, which makes the prospects of financing
bleak for the sector.
“Indian solar manufacturers are very much capable of
achieving the target of solar energy. However one of the
challenge is that the cost of fund is high and the banks
are still cautious while lending to the solar industry due
to few bad experiences in the past,” Singh added.
Another challenge is its dependency on the Chinese
market for the solar equipment. India’s manufacturing
capacity is limited and depends highly on Chinese im-
ports. Almost 95 percent of the solar cells and modules
currently being used by Indian solar developers are im-
ported. Indian solar manufacturers are finding it diffi-
cult to compete with their Chinese counterparts. While
The US and European Union have levied anti-dumping
duties on Chinese solar products, India removed anti-
dumping duty on solar panels in September 2014“In the absence of manufacturing, India will need to
import $42 billion of solar equipment by 2030 corre-
sponding to 100 GW of installed capacity,” according to a
report by KPMG, an advisory firm.
In order to boost manufacturing, the MNRE and Niti
Aayog are in the process of formulating a new and re-
vised solar manufacturing policy, which is expected by
the end of this year.
Reluctance of power distribution companies are an-
other issue that needs to be sorted out.
“Solar installations and its share of energy generation
has picked up speed but distribution companies con-
tinue to be a drag on the sector and are showing reluc-
tance to purchase solar in light of low power demand
and cheap power availability on the exchanges,” Mercom
Capital Group CEO and Co-Founder Raj Prabhu said.
“This is an alarming development that the central
government should address immediately to restore con-
fidence among developers and investors,” Prabhu added.
Land acquisition is another challenge for the success
off the mission. Of the 100GW target, 60GW are to be
ground-mounted medium, which require as much land
as conventional power plants. Given the target, land re-
quirement will be about 1,214 sq km, which is not easy to
procure. <n (^) Germany, USA and Japan are leaders in
adopting grid-connected SPV Rooftop systems
nGermany has highest PV installed capacity of
over 38 GW of which 71% is in rooftop segment.
n Italy has 12.7 GW PV installation with over 60%
rooftop systems
n In Europe of total 50.6 GW PV installation, over
50% in in rooftop segment.
n US has the installed capacity of 25 GW
GLOBAL SCAN
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olar
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