Why are global solar firms in a wait-and-watch mode in India?

India is expected to add new solar capacity of over 5 GW this year as against less than 1 GW just two years ago. There are an estimated 15 GW of projects already allocated and in different stages of development. 2017 onwards, India should join the exclusive top three solar countries club alongside China and USA.

Growing market has led to a burgeoning investment interest from Indian and international developers in the sector. The international developers are attracted by the prospect of a growing and open market. Notable players include Fortum, Softbank, Engie, EdF, Sky Power, First Solar, FRV, IBC Solar, Sembcorp and CLP. They have more solar experience and better access to technology and financial capital in comparison to Indian developers.

But we find that the international developers, despite their competitive advantage, have been reserved with their appetite. There are currently five Indian developers with a commissioned plus pipeline capacity of over 1,000 MW. In contrast, the biggest international developer so far is Engie (Solaire Direct) with total capacity of less than 400 MW. Utilities such as Sembcorp, CLP and Statkraft, who have been in India for many years, have barely shown any interest in the solar sector so far. Read more…