India has high levels of solar irradiation compared to other major solar energy markets. This, along with rising energy demand and unelectrified villages, shows potential for solar energy growth in India. While solar capacity additions dropped 7% in 2013, India still ranked sixth globally for additions that year. The government aims to achieve 100 GW of solar capacity over the next five years through policies that drive investment in the sector.

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Compiled by: Diya Menon
India has the highest irradiation compared to other key markets in the solar energy sector. This
coupled with the country's rising energy demand and presence of unelectrified villages
showcases the potential for growth of solar energy in India. Even though capacity additions
dropped by 7% in 2013 compared to the previous year, the country ranked sixth across the globe
in capacity additions. With the Jawaharlal Nehru National Solar Mission revising its target to
achieve 100 GW over the next five years, the key factor would be government policies that could
drive investments within the sector.
Aranca’s Views
2,517
Megawatts
(MW)
Total Grid
Connected
Installed
Capacity in
India, 2014
Grid connected installed capacity in key solar energy
producing states
Average Solar Irradiation in Other Leading Markets (KWh/m2
)
859
MW
681
MW
Gujarat Rajasthan
Madhya Pradesh Maharashtra Andhra Pradesh Tamil Nadu
398
MW
206
MW
107
MW
96
MW
2011
420%
2012
189 MW
983 MW
-7%
916 MW
Solar
Capacity
Additions in
India, 2013
Despite the decrease in capacity additions in 2013, India still ranked sixth in global capacity
additions for the same year.
5.1
KWh/m2
Average Solar
Irradiation
in India US
4.2
3.6
China
Spain Italy
2.9
Australia
Japan
3.6
3.8
Germany
4.8
4.7
1,455
2,332
5,563
3,916
2012
2014E
2015F
2013
7,697 MW
Forecasted
Solar Market
Size in India,
2016
E refers to Expected
F refers to Forecasted
High irradiation, especially in Gujarat and
Rajasthan
Limited reserves of conventional energy
resources and the sizeable number of
unelectrified villages
Government initiatives: 30% capital
subsidy for rooftop systems and projects
up to 500KW
Income tax exemption on profit for solar
projects for 10 years
Limited financing options
Legal risks over Power Purchase
Agreements (PPAs)
Fluctuating Indian rupee deters
international investors
Delayed projects due to uncertainties
and lack of transparency
Source: Bridge To India, 18th Electric Power Survey of India; Aranca Analysis
Key ChallengesKey Drivers
Solar Energy in India
Shinning Bright!
Favorable government policies and high irradiation* levels
are expected to drive the Indian solar power market.
The capacity is expected to expand three times by 2016.
* - Irradiation refers to the exposure to radiation
# - KW: Kilowatt; MW: Megawatt; KWh/m2: Kilowatt hours per square meter
#