In just 18 months, India’s  solar power capacity has doubled to almost 7gw. Now some think it’s time for an upward revision of the goal of 100gw by 2022. Now  we can see India’s willingness to contribute to the global effort to reduce carbon pollution. “India is an interesting and inspiring example. The ambition is amazing,” says Adnan Amin, director general, International Renewable Energy Agency (IRENA), the Abu Dhabi based intergovernmental body promoting renewable energy.

In 2014, when Prime Minister Narendra Modi announced the 100gw target, India had 3gw of solar energy and 33.8gw of renewable energy capacity. The government did not stop there. In January 2015, it upped the 2022 target to 175gw of renewable energy (RE) capacity, including wind and biomass. Then in October 2015, India pledged — as part of the Paris Agreement, the UN ­sponsored global effort to tackle climate change — that by 2030, non-­fossil fuels would account for 40% of the total energy generation capacity. This, according to officials involved in drawing up the plan, translates to almost 300gw of RE capacity. IRENA estimates that by 2030, India’s solar photovoltaic (PV) deployment would be about 209gw.

The increased pace of capacity addition shows GoI is serious about achieving the targets. India’s RE capacity has gone from 33.8gw to 43gw, overtaking hydroelectric capacity. “Unlike before, there is political support for the renewable energy programme at the highest level — the Prime Minister’s Office is directly supporting it,” said a senior energy sector official.

Still, RE in India will need to grow at  an average of 20gw+ annually.

Achieving the government’s “bold, ambitious, ambitious” RE targets is challenging. Accessing affordable finance, the poor financial health of state electricity distribution companies and technological challenges — be it grid stability or storage — are at the top of the list.

Energy minister Piyush Goyal is sure that the 175gw target will be met. “India is moving rapidly towards realising the clean energy vision of Prime Minister Narendra Modi,” Mr Goyal said earlier this year on Twitter. Bolstered by the progress, in May, Goyal said that he was considering an upward revision for 2022 solar target.

Renewable energy tariffs have hit record lows—an all-time low price of Rs 4.34 per unit was achieved for solar energy capacity in January. Goyal says that solar tariffs are becoming competitive in relation to thermal power costs. Increased interest in India is another factor underlying Goyal’s optimism. REN21, the global renewable energy multi-­stakeholder network, in its 2016 Global Status Report listed India among the top five countries for investment in renewable power and fuels in 2015, behind China, the US, Japan and the UK.

Consulting firm KPMG estimated in the November 2015 edition of The Rising Sun that in energy terms the market penetration of solar power could be 5.7% (54gw) in 2020 and 12.5% (166gw) in 2025.” Such optimism is not sufficient to achieve the goals. “To make good on these targets, we need to surmount the twin challenge of finance and technology,” says Ajay Mathur, director general of the Delhi based think tank Teri, who, till the beginning of the year, headed the government’s Bureau of Energy Efficiency. The total investment required to make good on the promise of 100gw solar energy capacity is estimated at about Rs 600,000 crore or almost $100 billion. The government’s outlay for the 12th Plan period is Rs 13,690 crore, barely a fraction of the required investment. A boost of Rs 10,000 crore in the 2016 Budget is a good sign but not enough.

Adding to the problem is the high cost of capital. “The ecosystem of renewable energy in India is still fraught with constraints, in particular with respect to financing,” said an expert group set up by the Niti Aayog. Financing is available, but the terms are unattractive— high cost of debt, short tenor loans, variable interest rates, adding up to as much as 30% of the cost. Policies to facilitate finance resulting in scaling up private sector investment are required.

The risk of extreme and unexpected currency devaluation needs to be addressed to facilitate foreign investment. “Currency hedging in India is expensive, making foreign financing as expensive as domestic,” explains Gireesh Shrimali of the Climate Policy Initiative. “I think that the whole issue of cost of finance and especially currency hedging is a big issue,” said Amin. The government has been considering innovative solutions but these are works in progress. But, resolving the finance piece alone would not be enough.

“That brings us to the technological challenge, which would be about grid integration technology, including storage,” said Mathur. Amin describes the technical challenge as a “big barrier”. Niti Aayog concurs: “It is apparent that the attainment of the goal of 175gw of renewable energy by 2022 is no longer a financial challenge, but a technical one.” Can the transmission system handle renewable energy, which, given the nature of the source, is periodic — unlike coal, gas or hydro?

“India’s grid is outdated,” says Nitin Pandit, CEO of WRI India, the India centre of the Washington­ based think tank World Resources Institute. “The inability to evacuate power from renewable energy sources and the lack of sophisticated operational mechanisms to accommodate intermittency are substantial stumbling blocks which make renewable energy integration on a large scale very difficult,” explains Pandit.

Out of the box thinking is the need of the hour, agree  all the experts. But it is  good news to know that India is on the road to a cleaner and greener electricity option.