International Energy Agency (IEA) reports that India’s solar photovoltaic (PV) deployment is set to decrease by 23 per cent in 2020 as compared to 2019, with the largest drop anticipated in distributed PV installations.
Despite government efforts to strengthen the performance of renewable energy sector the challenges concerning the financial health of state-owned companies responsible for the distribution and sale of electricity (DISCOMs) persist, hampering faster growth of renewables.
The pending payments due to all electricity generators increased by 48 per cent in 2019, and almost doubled in the case of renewables generators, a trend that continued in the first quarter of 2020.
The Covid-19 crisis has put additional pressure on DISCOMs and therefore on solar PV and wind development as during the lockdown, India’s electricity demand declined by 25 per cent, mostly in industrial and commercial segments, which account for the majority of discoms’ revenues in most states.
IEA said that it expects a 6 per cent year-on-year decline in demand in 2020, further worsening discoms with already challenging finances.
It, however, added that a rebound was expected in 2021 with capacity additions exceeding 2019 levels.
Reference- IEA website, Economic Times, The Guardian, Financial Express