India's commercial and industrial (C&I) renewable energy market is expected to grow by 47GW over the next five years as favorable policies and decarbonization targets spur growth.
The latest report from energy analytics company Bridge to India - India Corporate Renewable Energy Market Report March 2023 - says that while direct procurement of renewable energy currently accounts for only 6% of corporate electricity consumption in India, many corporate customers are committing to to increase renewable energy purchases. Corporate customers account for 51% of total consumption in India, so the underlying demand base is large, the report said.
India hopes to install 450GW of solar capacity by 2030, and its corporate sector will play a major role in this. Many companies are also working towards the RE100 commitment and net zero emissions targets, for which solar and wind will be the main solutions.
Among the options available to customers, "off-the-wall" (OA) and rooftop solar are the most promising. In India, wall-to-wall solar energy refers to generating electricity through grid-connected projects, and then transporting it to large consumers through infrastructure. Bridge to India predicts that by 2027, the compound annual growth rate of corporate renewable energy will be 23%, and the total amount of new additions will reach 47GW, most of which will be "wall sales" solar energy.
India has recently been experiencing component supply shortages as India's Basic Customs Duty (BCD) import duty and Approved List of Types and Manufacturers (ALMM) programs continue to restrict supply. In view of this, the report believes that the growth rate will slow down for the rest of this year, but the numbers will start to grow faster in 2024 and beyond. Corporate renewable energy capacity is expected to add 6.5GW in 2023 and more than 9GW in 2024.
OA wind power, OA PV and rooftop PV in India
In January, PV Tech Premium spoke to Bridge to India's Vinay Rustagi (one of the authors of this report) about the outlook for India's solar industry amid module shortages. He echoed the report's conclusions, arguing that the challenges that have plagued the industry in recent years will begin to recede in 2024.
Another point that Rustagi made in his conversation with this magazine is that legislation and the development of renewable energy is not consistent across the states of India. The Corporate Renewable Energy Market Report shows that, at least in the business sector, central policy is playing a positive role.
The introduction of the single window application process for OA projects to centralize all approval applications from corporate customers in one place is expected to increase corporate utilization (for renewable energy) and the government’s decision to waive inter-state transmission charges, thereby opening up the market.
One of the challenges in this regard is the reluctance of some Indian states to lose dedicated and profitable distribution company business. The media reported last year on the continued financial woes of India's electricity distribution companies.
Bridge to India also said state government guidelines, including net metering and feed-in tariff schemes, allow rooftop solar customers multiple grid connection options, which are expected to drive uptake in businesses.
The enterprise market also appears to be finding its own solutions. New business models, such as virtual power purchase agreements (VPPAs), have also emerged in India's industrial and commercial renewable energy market, which can increase the net penetration of renewable energy and circumvent certain legal, physical or other challenges. Curiosity is also growing for wind and solar co-location projects compared to India’s traditionally solar-dominated renewable energy mix, all of which points to a market sector willing to innovate and find flexible ways to grow.