Solar Industry Sees Surge in Interest Amid Energy Disruptions

Increased Demand from Manufacturing Units, Cold Chains, and Exporters

The ongoing Iran war has disrupted the supply of gas and crude oil, leading to a surge in interest from manufacturing units, cold chains, and exporters in the solar industry. With gas shortages and a scramble for supplies across industries, these businesses are looking to shift to more reliable and secure energy sources.

Solar Becomes Central to Energy Security and Cost Visibility

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Industry executives report a clear shift in how power-intensive sectors are approaching solar. It is no longer only a sustainability decision, but is becoming central to energy security, cost visibility, and expansion planning. Engineering, procurement, and construction (EPC) players and developers are seeing early activity, which is expected to translate into module procurement.

Key Sectors Driving Demand for Solar

Sectors such as data centres, manufacturing, warehousing, cold chains, and export-oriented industries are likely to move fastest as reliable and competitive power becomes a strategic requirement for them. Process industries such as steel, aluminium, pharmaceuticals, and chemicals are also seeking to ramp up their renewable energy sourcing.

India's Renewable Energy Capacity

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As of February 2024, India had 266 GW of installed renewable energy capacity, including large hydro, accounting for nearly 51% of total installed power capacity. Solar power alone has grown nearly 50-fold over the past 12 years, from 3 GW in 2014 to about 143 GW in February 2024.

Benefits of Expanding Open Access and Short-Term Power Markets

Expanding open access and short-term power markets can enable procurement of cheaper renewable electricity and avoid costly fuel imports, driving up operational expenses. An Institute for Energy Economics and Financial Analysis (IEEFA) report highlights the importance of reducing reliance on imported fuels and building a flexible and domestic electricity system.

Demand from Farming Sectors

Renewable firms are also seeing some demand from the farming sectors amid fuel shortage worries. There is a notable increase in inquiries for solar pumps, particularly as replacements for existing diesel-powered machines. Private energy players have also increased inquiries, seeking complete, end-to-end solar solutions.