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SBI, Hero Future Energies and the solar PV industry in India

solar PV industry in India
The World Bank’s Grid-Connected Rooftop Solar PV Project being implemented by SBI seeks to make discounted, long tenor finance easily available for suppliers and prosumers in India
Rising concerns about climate change, the health effects of air pollution, energy security and energy access, along with volatile oil prices in recent decades, have led to the need to produce and use alternative, low-carbon technology options such as renewables. The solar PV industry in India is growing, with solar being one of the pioneering renewable technologies over the decades.

Solar PV Industry in India

The World Bank’s Grid-Connected Rooftop Solar PV Project seeks to make discounted, long tenor finance easily available for both the suppliers of these solar PV units as well as consumers wishing to install them. The Project is being implemented by the State Bank of India (SBI), which has, with the help of the World Bank Group, developed new credit instruments for this segment. The new financing is helping drive down the cost of installing these rooftop units for consumers wishing to switch to renewable energy. With this new lending, users are not only able to generate clean, reliable energy for their own use, but are also able to feed surplus electricity into the national grid.
SBI has, up to 31 December 2018, approved credit of around $123 million which will allow more than 235 MW of solar rooftop capacity to be added to the grid. This is in addition to 62 MW already being generated through rooftop units installed by several large enterprises. These include large industrial units (Yamaha Motors, Hindustan Aeronautics Ltd etc), transport utilities (Gurgaon Rapid Metro), and institutions (NOIDA Expo, Ashoka University, Fortis Hospital etc).
In 2016, the government of India introduced a national wind-solar hybrid policy to resolve grid integration issues, with a proposed target of 10 GW of hybrid projects to be installed by 2022 (source: Zion Market Research). Just prior to approval of this policy, Hero Future Energies completed India’s first hybrid project, combining a 50 MW wind farm with a 28.8 MW solar PV site in Raichur district Karnataka in April 2018. This project is aimed to be retrofitted with lithium-ion battery storage technology to combat curtailment during times of strong wind resource availability. The Solar Energy Corporation of India issued tenders for 2.5 GW of hybrid wind and solar projects to be connected to India’s Interstate Transmission System.

Finance Minister Nirmala Sitharaman declared in her Budget 2020 speech that new domestic energy generation companies will pay a concessional corporate tax rate of 15%, on the condition that generation projects are operational by March 2023. There were many more announcements for the solar PV industry in India. On the new agenda is the implementation of Phase III of the off-grid solar PV programme, which covers installation of 3 lakh solar street lights, distributing to school children 25 lakh solar study lamps. In addition, under AJAY Phase II over 3 lakh solar street lights would be installed. 
Last year, solar PV again dominated total renewable and power capacity additions, adding twice as much capacity as wind and more than all fossil fuels and nuclear together, solar PV additions reaching around 94 GW, according to a report by IRENA.
The evolution of the solar PV industry so far has been remarkable, with several milestones achieved in recent years in terms of installations (including off-grid), cost reductions and technological advancements, as well as establishment of key solar energy associations like SEIA and NSEFI in India. 
China represents the leading solar market not only in Asia, but also in the world, with distributed plants contributing 47% of the capacity installed in 2018. As for India, installed rooftop capacity reached 6 GW in 2018, representing the addition of over 2.5 GW over the previous year. This increase, however, is marginal when compared to utility-scale installations in India, which represented 82% of cumulative installed capacity, while distributed represented just 10%.

Solar schemes by Government of India

The Ministry of New and Renewable Energy in India has formulated a new scheme Kisan Urja Suraksha evam Utthaan Mahabhiyan (KUSUM) for setting up decentralized ground mounted grid connected solar power plants, installation of standalone solar water pumps for agriculture and solarisation of existing grid connected agriculture pumps with the objective of providing financial and water security to farmers. State Government will be encouraged to put in place a mechanism through which surplus solar power could be purchased by the distribution companies at a tariff determined by the individual States.
Considering ample resource availability, significant market potential and cost competitiveness, the solar PV industry in India is expected to continue driving overall renewables growth in several regions over the next decade. From today’s levels, IRENA’s REmap analysis shows that solar PV power installations could grow almost six-fold over the next ten years, reaching a global cumulative capacity of 2,840 GW globally by 2030 and rising to 8,519 GW by 2050. This implies total installed capacity in 2050 almost eighteen times higher than in 2018.
At a global level, around 60% of total solar PV capacity in 2050 would be utility scale, with the remaining 40% distributed (rooftop). While utility-scale projects still predominate in 2050, the REmap analysis expects distributed solar PV installations to grow more rapidly, driven by policies and supportive measures, as well as consumer engagement in the clean energy transformation.