India’s solar energy sector has experienced incredible growth over the past few years. India is one of the largest producers of electricity in the world, but it is unable to meet its energy demand. After installing 60 GW of solar over the past few years, the country still has a pipeline of about 58 GW of utility-scale projects. This demonstrates the rapid expansion and continued development of the solar energy industry, making it a competitive alternative for the country. India requires a strong commitment because its population, size and huge potential for economic growth will increase its energy needs more than any other country in the coming decades. As the country’s economy expands rapidly and becomes a global industrial center, the demand for energy will increase. Increasing urbanization, rising incomes, and an ever-growing population will increase consumer demand for energy. According to studies, India’s share of the world’s total primary energy demand is expected to nearly quadruple to 11% by 2040. India needs to triple its energy production by 2030 to meet this huge increase in demand and at the same time meet its promise to reduce its carbon footprint by 35% from 2005 levels.
Here are some key factors that will influence the future of solar energy in India:
Foreign direct investment in the solar energy sector
Banning foreign direct investment or foreign direct investment in the sector is one of the important and important measures to develop this industry and accelerate the expansion of Indian enterprises investing in solar energy. Making the country more conducive to manufacturing, tax breaks and subsidies can really help the country’s solar sector expand rapidly. This will not only benefit businesses but also demonstrate how India’s overall solar industry can grow. The sector should be backward integrated and the government should encourage it. Many Indian companies are already providing services that meet global standards and can provide better customer service. This will help us stay innovative and achieve greater results in the solar energy market not only in India but globally.
The role of the private sector in promoting renewable energy
Between August and October 2021, India witnessed a coal crisis that resulted in high prices on the power exchange. The nation’s largest corporations have responded by changing course and focusing on more affordable, reliable and clean renewable energy sources. This shows that, in addition to the fact that renewable energy projects generate a higher return on investment, the economy drives such decisions. The growth of the solar sector is mainly driven by private players. Private businesses are getting involved in the renewable energy sector because it promises a faster return on investment than fossil fuel-based energy. Solar energy offers fantastic prospects for investors. According to the REN21 Renewables 2020 Global Status Report, between 2014 and 2019, investments in renewable energy projects and programs amounted to USD 64.4 billion. This result demonstrated the great potential for further expansion of the growth rate of the renewable energy sector.
India benefits greatly from its position as it is located in a tropical region which is favorable for the solar energy sector. It receives an enormous amount of solar energy throughout the year, which is equivalent to almost 3,000 long hours of sunlight. Therefore, due to its vast solar energy potential, India is able to help other nations in addition to meeting its own energy needs. In addition, some states of the country have the capacity to generate significant amounts of power even on cloudy days.
The solar energy sector will promote India’s Aatma Nirbhar mission
India is highly dependent on China for imports of several solar applications such as solar inverters and solar cells. The government’s recent policies are aimed at making India less dependent and self-reliant. The Finance Minister in the Annual Budget 2021 announced an increase in customs duty for the solar industry from 5% to 20% on solar inverters and from 5% to 15% on solar lanterns, making supportive statements that will encourage local manufacturing of solar inverters . The government’s goal is to increase the independence of local producers.
Thus, to combat the high cost of solar equipment, it is important to develop a strong domestic solar manufacturing ecosystem. India will need urgent measures to become self-sufficient and this will be possible only by encouraging and helping domestic manufacturers to give up import dependence and truly transform into Aatma Nirbha. Appropriate government policies in favor of the renewable energy sector must be implemented quickly and efficiently to promote growth and bring India closer to achieving these goals.
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The views expressed above are those of the author.
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