India is unlikely to achieve its target of 100 gigawatt (GW) solar electricity capacity as it faces short-term uncertainty due to imposition of various taxes, research and consultancy firm Wood Mackenzie said.
India's installed grid-connected power generation capacity increased 4 per cent from January to October 2018 to reach 347 GW.
Renewables accounted for 9.7 GW of the total increase of 13 GW, highlighting the significant investment flowing into the sector, it said in a note adding that India is, and will be, the third largest solar market globally in 2018 and 2019, respectively.
"As bid prices stabilise and costs continue to drop, long-term development remains positive but still not sufficient to meet the 100-GW solar target by 2022," said Rishab Shreshta, solar analyst at Wood Mackenzie.
"India faces short-term uncertainty due to the imposing of various taxes and levies on solar products, the cancellation of tenders and tariff renegotiations," he added.
The year-on-year growth rate of annual solar install capacity is expected to reduce from 63 per cent in 2017 to just over 1 per cent in 2018 before rebounding to over 12 per cent in 2019.
"Despite strong domestic demand and safeguard duties on imported solar modules, domestic solar manufacturers still struggle to compete with foreign suppliers," it said.