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Mumbai: India is expected to see a sharp rebound in capacity addition this year, said industry experts, after adding only 4.9 gigawatts (GW) of renewable energy capacity in 2020 due to disruptions caused by covid-19.

India will add a record about 16 gigawatts (GW) of renewable energy capacity in 2021, showed estimates by energy consultancy firm Bridge To India. In December, the country’s total renewable energy capacity crossed the 94GW mark.

Following the covid-19 outbreak, 2020 reported the lowest capacity additions in the last five years. Persistent delays in land acquisition and transmission connectivity, rise in module prices and delayed shipments from China (over 80% solar modules used in India are sourced) contributed to the slowdown last year, the report said.

However, despite easing of covid-led challenges concerns remain, and could impede capacity addition this year. “There are problems with cancelled tenders and persistent connectivity issues. We have a total solar pipeline of 50GW right now. But of this, for about 18GW, the power purchase agreements haven’t been signed yet and there are other auctions which have been cancelled by state governments," said Vinay Rustagi, managing director, Bridge to India.

Sharp rebound expected in green capacity addition
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Sharp rebound expected in green capacity addition

Of the 16GW projected growth, 11GW will come from utility scale solar, 2.5GW from wind power projects and 2.5GW from rooftop solar installations, showed estimates.

Rustagi said India will add 29GW of renewable energy plants by the end of 2022, taking India’s total capacity to 123GW. While this falls short of its ambitious target, India is still making headway to implementing one of the world’s largest clean energy programme.

The Centre aims to build 175GW of clean energy capacity by 2022 as part of its global climate change commitments, of which 100GW will come from solar projects.

In her budget announcement on 1 February, finance minister Nirmala Sitharaman promised an additional capital infusion of 1,000 crore to Solar Energy Corp. of India, the nodal agency implementing the National Solar Mission, and guarantees renewable power purchases from private developers. A further 1,500 crore will be provided to the Indian Renewable Energy Development Agency to increase debt financing for upcoming projects.

However, rooftop solar, which was supposed to reach 40GW of capacity by the end of 2022, is still lagging. States are changing their net metering policies and some distribution companies are looking to increase charges on rooftop solar power producers.

One key hurdle to growth here is the lack of adequate financing for clients who wish to set up rooftop solar systems.

“The government needs to push lending to the roof-top solar sector," said Animesh Damani, managing partner, Artha Energy Resources. “Currently, the banks do not offer rooftop solar-specific loans. These loans are only offered when the property on which the solar rooftop is proposed is offered as collateral. We need a dedicated facility setup through one of our existing central government PSU lenders which will enable rooftop projects to be used as collaterals and that alone to finance such projects. There is also a need for more policy-driven initiatives to enable domestic manufacturing. Higher costs of solar power will derail the targets the country aims to achieve to meet its Paris commitments."

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