India installs 557 MW of solar so far in 2013

17 May 2013

Mercom Capital Group LLC (Austin, Texas, US) has released its “Indian Solar Market Update” for the second quarter of 2013, reporting that 557 MW of solar photovoltaic (PV) and concentrating solar power (CSP) has been installed to date in 2013.

Mercom notes that only 60% of the targeted capacity for Phase 1 of the nation's National Solar Mission (NSM) has been installed, despite a May 31st, 2013 deadline for Phase 1. The company expects 2013 installations to be only 12% higher than 2012 and describes a flawed and uncertain policy environment.

“The current solar policy environment looks more like an experiment than a serious policy that will help solve the current power crisis in India,” states Mercom CEO Raj Prabhu.

“Solar can truly be a game changer in India as a disruptive energy source that has the potential to solve energy poverty, address India’s massive power shortage problem and dramatically impact India’s slow growth rate and inflation. However, the current 'please all parties' policy regime is forgetting the key stakeholder, the consumer.”

Domestic content, VGF mechanisms slow progress

Specifically, Prabhu cites the allocation of PV versus CSP and domestic content requirements. He notes that only 50 MW of the 470 MW of CSP due is expected to be commissioned by the end of 2013, with the rest granted a 10 month extension.

Prabhu also notes that domestic content requirements continue to be pursued in the second phase of the NSM. These have prevented PV and CSP components from being sourced at the most effective prices, despite procurement methods intended to produce the lowest costs.

Finally, he finds that the Viability Gap Funding (VGF) mechanism proposed for Phase 2 provides no incentive to build more productive projects, which he calls a “recipe for disaster”.

State policies more successful than NSM

Prabhu notes that the various state programs have been much more successful than the NSM, with state and other policies responsible for 1,170 MW of new PV and CSP, as opposed to 591 MW for the NSM.

By far the most successful state is Gujarat, which has installed 857 MW of PV plants and has no new policies announced.