India to add 14.5 GW of PV per year in fiscal 2025, 2026

India Ratings and Research says India will maintain its current pace of renewable-energy capacity additions due to a significant drop in equipment prices and ongoing policy support.

From pv magazine India

India Ratings and Research (Ind-Ra) said it expects India’s annual renewable capacity additions to remain at 15 GW to 18 GW in fiscal 2025 and fiscal 2026. It said 75% to 80% of annual installations, or up to 14.5 GW, will come from solar and around 20% from wind. Installations will be driven by a significant reduction in equipment prices, ongoing policy support, the availability of liquidity, and the investment plans of large corporate players.

“However, the execution timelines of renewable capacity addition would continue to hinge on the regulatory stance towards import duties on cell and modules, support towards domestic cells and modules manufacturing, and indigenization push towards domestic equipment sourcing,” said Ind-Ra.

The transition to renewables requires the deployment and development of energy storage capacity, given the intermittent nature of renewable energy for grid stability. Ind-Ra said it expects pumped storage hydro power projects to emerge as a viable solution, given that battery storage is currently economically less viable.

Ind-Ra has maintained a neutral outlook for the power sector for fiscal 2025, as it believes the overall plant load factor (PLF) of thermal power plants will continue to improve and edge closer to 70% in fiscal 2025. It said that thermal PLFs will remain healthy due to higher power demand, a ramp-up in domestic coal production, slower capacity additions, and dependence on coal-based generation until sufficient storage capacity is built up for the transition to renewables.

“Ind-Ra continues to see a demand-supply mismatch in the power market, which would lead to a continued uptick in plant load factors of thermal plants and elevated merchant tariffs,” said Bhanu Patni, associate director of corporate ratings for Ind-Ra. “While solar capacity addition has picked up pace following a reduction in the module prices and renewable capacity addition is likely to remain at over 15GW annually, effective storage options still need to be developed for the renewable capacities to be able to provide round-the-clock power.”

The agency said it expects merchant market prices to remain high in fiscal 2025 due to higher demand and slower thermal capacity additions.

This post appeared first on PV Magazine.

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