Solar Industry Analysis

1. Key Trends –
 India is now the third largest solar power market in the world. Over the past three years, solar
power capacity has increased at a compound annual growth rate of over 100 per cent. A total of
47 solar parks with generation capacity of 26,694 MW have been approved in India, including
the world’s largest solar park in Karnataka. (https://www.ibef.org/industry/renewable-
energy.aspx, n.d.)
 As India aims to develop 100 GW solar capacity by 2022 and reduce the dependence on
hydrocarbons-based fuels, the government is formulating favorable policies aimed at removing
the bottlenecks in project development, transmission and project allocation, and reducing the cost
of solar power projects. Custom and excise duty benefits have been provided to the solar rooftop
sector by Ministry of New and Renewable Energy (MNRE) and solar energy is a key part of the
government’s aim of universal electrification. Growth of solar industry is also helped by the fact
that India is the cofounder of the International Solar Alliance.
(https://renewablewatch.in/2018/07/30/solar-trends/, n.d.)
 The solar power tariff has been falling continuously for the past few years, with recent bidding in
MP showing even lower prices than the conventional sources of electricity.

2. Key Economic Drivers –

 A major factor behind Indian solar sector’s giant leap from 10MW energy generation capacity in
2010 to 8GW in 2016 is the reduction in costs of photo-voltaic cells and continuous innovation
in this technology, particularly with the assistance of the clean energy fund granted in the Paris
Environmental Summit.
 Mandating solar installation in government buildings, raising tax-free solar bonds, offering long
tenure loans, and ‘Solar Park’ development for large scale solar implementation has increased
India’s solar generation capacity. Plus, the government is aggressively looking into green energy
corridor development for easy power transmission, domestic manufacturing enhancement by
establishing DCR quota for projects, and Net-metering to harness the true potential of solar
industry.
 Government has opened up 100 per cent foreign direct investment under the automatic route and
74 per cent foreign equity participation in a joint venture in the solar sector. India’s potential of
generating solar energy has attracted $100 billion investment. Investors have already announced
to invest (approx.) $37 billion for setting up solar plants in country
(https://indiaincgroup.com/drivers-indian-solar-growth/, n.d.)
.
3. Major Revenue Streams – Major source of revenue of solar industry comes from the power sector,
particularly the manufacturing of the photo-voltaic cell and other solar panel related components. There
are also conventional solar powered products like the solar cooker, solar water heater etc. A new area of
development are the beginning of adoption of solar pumps in irrigation in agriculture, which is also
being subsidized by the government.

4. Major Cost Items – Major cost items are the raw materials required for the manufacture of solar cell.
The major input are the silicon wafers, but there are also some rare earth elements and precious metals
that are used for manufacturing solar panels and photo voltaic cells. Other cost items may include the
electricity transmission equipments and metering costs.
 5. Major Consumer Segments –
 Rooftop Solar Power – It is a rapidly growing industry, especially as it is backed by the
government through subsidies and tax benefits. The major clients are the large office spaces and
multistoried residential apartments.
 Solar Parks – The government is establishing solar parks across the length and breadth of the
country at a rapid pace, and so there are many EPC contracts being given out backed by both
public and private investments.
 Small scale industry – These include utility products like solar cookers, solar pumps etc that are
being manufacture on a small scale right now.

6. Major Companies in the space –

 Tata Power Solar Systems Ltd. - A complete subsidiary of Tata Power, this is India’s leading
solar company. Headquartered in Bengaluru, it is India’s largest solar company.
 EMMVEE
 Loom Solar Pvt. Ltd.
 Icomm Tele Ltd.
 Moser Baer Solar Ltd. (MBSL)
 Indosolar Ltd. etc. (https://www.eletimes.com/top-10-solar-companies-india, n.d.)

7. Major risks/challenges –
 An inadequate and unstable grid
 Poor quality and construction of assets that are unable to withstand natural phenomenon
 Low investment in research and development
 A myopic view of ancillary services and the structure of energy markets

References
https://indiaincgroup.com/drivers-indian-solar-growth/. (n.d.).

https://renewablewatch.in/2018/07/30/solar-trends/. (n.d.).

https://www.eletimes.com/top-10-solar-companies-india. (n.d.).

https://www.ibef.org/industry/renewable-energy.aspx. (n.d.).