Desert projects like this one could be key to India's solar growth. Source: First Solar.
India has grown tired of being reliant on foreign coal for electricity and is making a big bet on a resource it has plenty of: solar energy.
The country has laid out a plan to install 100 GW of solar by 2022 -- enough solar to power the equivalent of 16.4 million American homes. But the Indian electricity industry may not be ready to install that much solar, and the grid itself may not be able to handle the influx of energy.
This presents both an opportunity and a challenge for the solar industry. However, it's better to see big goals that might not be reached and set up the infrastructure for future success in the process.
India's massive growth projections
Below is a table of India's current plans to build solar projects. Not only is the growth from 2016 to 2017 incredible, it's difficult to determine how the country would build enough infrastructure to put up 4.8 GW of rooftop solar in just two years.
|
Year |
Rooftop (MW) |
Ground Mounted (MW) |
Total (MW) |
|---|---|---|---|
|
2016 |
200 |
1,800 |
2,000 |
|
2017 |
4,800 |
7,200 |
12,000 |
|
2018 |
5,000 |
10,000 |
15,000 |
|
2019 |
6,000 |
10,000 |
16,000 |
|
2020 |
7,000 |
10,000 |
17,000 |
|
2021 |
8,000 |
9,500 |
17,500 |
|
2022 |
9,000 |
8,500 |
17,500 |
|
Total |
40,000 |
57,000 |
97,000 |
Source: Indian's National Solar Mission.
To put the rooftop space into perspective, the U.S. installed 1.2 GW of residential solar in all of 2014. The largest company in the space, SolarCity, is hoping to install 1 GW of solar this year, its ninth full year of operations.
The idea that India can build a rooftop solar business overnight is improbable at best.
Utility solar is easier to scale up than rooftop systems like this one. Source: SolarCity.
Utility-scale solar sounds more practical
What is easier to build is large solar projects, like the 500 MW projects SunEdison (SUNE +0.00%) says it will build in India. SunEdison and First Solar (FSLR 1.56%) say they see 15 GW and 5 GW, respectively, of potential for their businesses in India.
For the ground-mounted business, India has its sights set on massive projects that would feed the central electric grid, much like large projects in the U.S. do. That's a piece of the solar puzzle, but India's electric grid is notoriously unreliable, and innovative solutions may be needed to feed solar energy to less developed communities. That's where microgrids may play a big role in the industry's development in India.
Leading the charge into microgrids
Microgrids have been proposed as a solution to India's rural energy challenges, and even some energy usage here in the U.S. These would be local grids with wind- or solar-generating assets, energy storage, and demand sources all tied together. They would be similar to a centralized grid, just on a much smaller scale.
SunEdison has begun work on microgrids and sees them as a key solution for India. It's unlikely the central grid will be either extended far enough or become reliable enough for all of India's citizens, so microgrids could be key to hitting India's lofty solar goals.
Could India become a solar power?
I think India's solar goals are probably higher than they can realistically reach, but it's possible the country could be a top 3 market within a few years, even if it falls short of these goals. For solar installers and panel makers, this could raise global demand enough to command higher margins in the process.
Still, India has made lofty solar goals before and fallen short. So, keep an eye on whether there's enough action to back up the talk coming out of India right now.
