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India is expected to add solar power capacity at more than twice the speed of this year in 2015, after a disappointing 2014 when installations of photovoltaic cells have fallen short of previous year's levels, a solar consultancy firm said. India's total solar installations have crossed the 3-gigawatt capacity mark with addition of 734 megawatt so far this year, and the country is expected to end the year with total additions of 800 MW, as much as 20% less than in 2013.
Land acquisition delays due to elections and uncertainty caused by an anti-dumping issue contributed to the slowdown in installations. In its quarterly update on the Indian solar market, Mercom Capital Group forecast 2015 installations to reach about 1,800 MW by generation capacity. India earlier this year dropped plans to impose anti-dumping duty on solar panel imports. The duty, aimed at protecting local manufacturers, would have increased the import cost of local project developers who rely mostly on countries like the US, China and Taiwan for the photovoltaic cells.
"The Indian solar industry is visibly upbeat since the elections and especially after getting past the anti-dumping case," commented Raj Prabhu, chief executive and cofounder of Mercom Capital. "Recent cancellations of coal mining licenses by the Supreme Court (citing irregularities in the allotment process) amid rising coal imports and increasing costs, and continuing power shortages have all contributed to the positive momentum in the solar sector."
The Ministry of New and Renewable Energy's (MNRE) new target is to increase solar installations by fivefold to 15 GW by 2019 via solar parks - large areas and infrastructure set aside by states to accommodate installations of 500-1,000 MW.
"There have been other announcements in a short period of time; a new program aimed at 'ultra-mega solar projects' with a goal of installing 20 GW by establishing solar parks was announced recently," the study said. The ministry has also asked public sector units to set up large solar projects to meet their obligations on using renewable energy. At the request of the Prime Minister's office, the ministry is also working on a plan to increase the installation goal under the Jawaharlal Nehru National Solar Mission to 100 GW, it said. Prabhu is sceptical of the plan of setting up large projects.
"In most major solar markets, with a drop in costs, the market has shifted from large-scale projects to residential and commercial rooftop projects - closer to the end-user," he said. "With transmission and distribution losses estimated at about 25%, and considering the country is severely challenged when it comes to land availability and grid infrastructure, this (large projects) may not be a sound long-term strategy."
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