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India’s Solar Energy Challenge Compared to China
Context:
Pre-COVID, India was closing the gap with China in solar energy. However, post-pandemic, China surged ahead, with the capacity gap widening from 17 GW in 2018 to over 200 GW in 2023, as China added 200 GW compared to India’s 7.5 GW, marking a 44% drop for India year-on-year.
Pre-COVID Solar Progress:
- India’s Solar Growth (Pre-2020): India was closing the gap with China in solar energy capacity.
- In 2018, the difference between their capacity additions was 17 GW (India added 7 GW vs. China’s 24 GW).
- Post-Pandemic Slowdown: Post-COVID, India’s solar growth slowed while China surged ahead.
- By 2023, China added over 200 GW compared to India’s 7.5 GW, a 44% drop year-on-year.
- First Half of 2024: China added over 100 GW, while India set a record with 14.9 GW, primarily due to a massive January-March quarter.
Challenges Facing India’s Solar Growth:
- Impact of ALMM Program: The re-imposition of the Approved Lists of Models and Manufacturers (ALMM) program in India led to supply chain constraints and a 65% drop in tendering for utility-scale projects in Q2 2024.
- Supply Chain Constraints: Issues in land acquisition, grid connectivity, and regulatory delays hinder growth.
- India’s Regulatory Hurdles: Slow approvals and emphasis on local manufacturing slow renewable energy expansion.
China’s Strategic Advantages:
- Government Support and Policy Measures: China’s rapid solar expansion is driven by strong government support, R&D investment, and integrated supply chains.
- The “whole county solar” and “clean energy bases” programs enable large-scale solar installations.
- Economies of Scale: China’s large land area and investments in infrastructure have facilitated faster renewable energy deployment.
- China’s overall installed power capacity is over 3,000 GW compared to India’s 450 GW.
- Technological Advancements: China’s solar industry is driven by cutting-edge technology and overcapacity, leading to higher efficiency.
China’s Solar Ecosystem:
- China has built a strong renewable energy ecosystem with 800 GW of manufacturing capacity and easy land acquisition.
- China’s grid issues haven’t slowed down its massive solar expansions.
Global Solar Market Dynamics:
- China’s solar industry faces oversupply issues, leading to reduced prices and intense competition.
- The global market is adjusting to the dominance of Chinese solar panels, with some firms going bankrupt due to fierce competition.
International Trade and Policy Tensions:
- China’s subsidies for its solar industry have led to trade tensions, with the EU investigating potential unfair practices.
- Beijing denies unfair practices and has retaliated with probes into European imports.
India’s Lag in Solar Installations:
- 2018 Slowdown: India’s solar growth slowed due to policy uncertainties, such as safeguard duties on imports and grid issues.
- 2023 Installations: India installed only 7.5 GW of solar capacity, with land and transmission issues further hindering growth.
Future Prospects and Opportunities:
- India’s Renewable Energy Targets: India aims to achieve 50% cumulative electric power installed capacity from renewables by 2030 and reach net-zero carbon emissions by 2070.
- India has ambitious targets for 500 GW of renewable capacity by 2030, necessitating significant capacity additions.
- Global Climate Agenda: India’s commitment aligns with the global goal of tripling renewable energy capacity by 2030, as emphasised at COP28.
- Untapped Potential: With an estimated solar potential of 749 GW, India has substantial room for growth in solar energy.
- Record Solar Bids: India invited bids for 70 GW of utility-scale solar projects, indicating a potential increase in future installations.
Global Context and India’s Role:
- Global Solar Trends: According to the Global Electricity Review 2024, solar energy produced 5.5% of global electricity in 2023, with China and India being major contributors.
- India’s Solar Growth: India became the world’s third-largest solar power generator in 2023, with a 17-fold increase in solar generation since 2015.
- Global Climate Commitments: India aligns with global goals to triple renewable capacity by 2030 and reduce carbon intensity by 45%.
Challenges and Solutions:
- Infrastructure and Finance: Meeting renewable energy targets requires addressing infrastructure gaps and accelerating financial investments.
- Policy Implementation: Effective policies and streamlined regulatory processes are crucial for India to achieve its renewable energy goals.
Conclusion: India’s solar energy sector has significant potential but requires enhanced policies, land availability, and grid infrastructure to catch up with China’s solar advancements and meet global climate targets.
