IEA Says Solar PV Capacity Additions Will Slowdown In India In 2023

Highlights :

  • The IEA has come up with a new report called ‘Renewable Energy Market Update – June 2023’ that says that slowdown in solar capacity is due to supply chain challenges lower auction volumes and trade policies.
  • IEA says that a rebound could be expected in 2024 in solar expansion.
IEA Says Solar PV Capacity Additions Will Slowdown In India In 2023

The new report by International Energy Agency (IEA) – Renewable Energy Market Update, June 2023 – has said that the utility-scale solar PV projects are expected to slow briefly in 2023 due to supply chain challenges, lower auction volumes and trade policies. The IEA report has shown concern as solar power is India’s largest renewable electricity growth segment. The report seems to be in direct contrast to internal projections in India, with research and ratings agency ICRA recently projecting 20 GW of installations in 2023-24 as compared to the 15 GW in 2022-23.

IEA finds that on one hand large-scale PV manufacturing is emerging in India. But on the other, import tariffs are causing short-term demand and supply mismatches. This demand and supply mismatch in solar equipment may harm the solar power industry.

IEA mentions that in 2022, the utility-scale solar power capacity additions was 14 GW which itself is a record. This would amount to more than two-thirds of renewable energy growth in India. But this is expected to be 20% slower this year. IEA says that a rebound could be expected in 2024 in terms of solar expansion.

The IEA report also said that that India’s overall renewable capacity additions are expected to increase again in 2023 and 2024. This is due to faster onshore wind, hydropower and distributed solar PV deployment across the country.

Global Scenario

IEA said in its report that Global renewable capacity additions are set to soar by 107 GW, the largest absolute increase ever, to more than 440 GW in 2023. IEA held that the unprecedented growth in solar power additions is being driven by expanding policy support, growing energy security concerns and improving competitiveness against fossil fuel alternatives.

“These factors are outweighing rising interest rates, higher investment costs and persistent supply chain challenges,” mentions IEA.

IEA report said that declining module prices, greater uptake of distributed solar PV systems are driving higher annual solar additions in all major markets that include China, EU, the US and India.

China will continue to dominate global manufacturing capacity for solar photovoltaics. But, the new announcements of solar PV manufacturing projects in the United States and India have doubled since December. This means, said IEA, indicates that supply chains are diversifying.

Wind Power

With regards to wind energy development across the world, IEA mentioned that after two consecutive years of decline, onshore wind capacity additions are on course to rebound by 70% in 2023 to 107 GW. This will also be an all-time record amount.

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