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Land Lease Model: the new optimism for Solar Industry

India: The solar industry for long has been facing issues regarding the procurement of land for project development. Learning from the practices world over the players in the industry are now moving towards the adoption of lease or rental arrangements. As part of the arrangement the landowners will be securing a lump-sum amount of at least USD100 thousand per acre per year from the project builder for the lease period. At the end of the lease period the proprietor is free to sell off the land. The trend has been picking up in states like Telengana, Andhra Pradesh, Himachal, Uttarakhand and Punjab. The option is excellent fit for states with expensive land. With the developers entering into 25 to 30 years’ rental agreement, the landowner earns a stable annuity income plus retains the right to future capital gains.

TechSci Research depicts that India’s solar power potential within the country’s geographical limits is high as majority of the geographical area lies within the tropics, thereby creating the demand for Solar Rooftop market. As per the Census of India 2011 and Wasteland Atlas of India 2011, the total solar power capacity in the country stood at 748 GW, which is more than twice of the country’s total installed power capacity.  In 2015, the Government of India set a target of 100 GW of solar power generation in the country by 2022. Backed by favorable government measures and abundant solar resources, the solar rooftop market in India is expected to grow at a robust pace over the next five years. 

According to the TechSci Research report, “India Solar Rooftop Market By State, By Connectivity, By End User, Competition Forecast & Opportunities, 2011 – 2021”, the solar rooftop market in India to grow at a CAGR of over 60% during 2016 - 2021. In India, the solar power market is in its developing stage, and numerous measures are being taken by the government to promote the use of solar energy in the country.

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