"India is poised to become the fourth largest solar market in 2016, leaving behind three major European solar markets (UK, Germany and France) with expected new capacity addition of 5.4 GW in 2016," consulting firm Bridge to India said in its latest edition of India Solar Handbook report.
According to the report, with rapid falling costs and increased demand for solar installation, the market has seen tremendous growth over past 12 months, making it one of the most favourable markets for investments from global players.
As per the report, about 65 GW of solar capacity is expected to be added globally in 2016, with Asian countries dominating the global PV market.
As of April 2016, India has already installed 6.6 GW of utility scale solar and 740 MW of rooftop solar capacity.
"Our estimates show that unless challenges like transmission and financing are addressed urgently, the industry will miss the targets by big margins," Bridge to India Managing Director Vinay Rustagi said.
Its India solar CEO Survey shows that the industry is very buoyant about sector growth prospects and expecting new capacity addition to increase from a stagnant 1 GW per annum to about 6-8 GW per annum going forward.
The industry is also very positive about the prospects of domestic manufacturing and expecting an annual cell-module manufacturing capacity of 5 GW by 2022.
As the survey shows, the southern states are playing the lead role in the sector. But the highest power consuming states like Maharashtra, UP and Gujarat have been relatively slow to grow.
The other key theme emerging from the survey is that the end consumer driven market, rooftop solar and open access solar, still seem very anaemic in comparison to the policy driven projects.