State power utilities need to buy more green power if India has to meet its solar installation targets said analysts from Mercom Capital Group. Renewable power purchase obligation (RPO) is the single most important policy driving renewable energy installations and achievement of an aggressive goal of installing 175 GW by 2022 including 100GW of solar power capacity. Over the past three years, as states scrambled to fulfill their RPOs, cumulative installation figures for solar and wind energy increased exponentially, but unless compliance improves drastically it will be a challenge to meet the lofty 2022 installation goals. Installed capacity of grid connected solar power at the beginning of the 11th five-year plan period was zero. This rose to 2,656 MW by March 2014. It has now crossed 10 GW of solar thanks mainly due to RPO. This has ramped up trading in renewable energy certificates (RECs). States with high solar and wind potential are tendering more projects. Nevertheless, 10 GW of solar installations is not as impressive as it sounds. India needs to install 90 GW of solar in five year – a rate of 18 GW per year. Most states have specified RPO targets. The World Bank is making financing available for renewables in India and other development banks are following suit. This has provided developers and EPC contractors with easy financing at low rates and is bound to spur installation activity.

(Economic Times)