Assessing Risk and Resilience in India’s Solar Energy Sector Post-Industrial Accident

India’s solar energy sector has emerged as a cornerstone of its climate ambitions, with installed capacity surging to 89.1 GW by September 2024—a 167% year-over-year increase from 6.2 GW in 2023 [1]. Yet, beneath this rapid growth lies a complex web of operational and regulatory challenges that threaten long-term investment viability. Industrial accidents, weak transmission infrastructure, and unregulated waste management have created a landscape where resilience is as critical as expansion.

Operational Risks: From Accidents to Waste Crises

India’s energy sector witnessed over 240 major industrial accidents in 2024, resulting in 400 fatalities and 850 injuries, according to a LinkedIn analysis [4]. While specific solar sector incidents remain underreported, the broader context of lax safety enforcement—exacerbated by policies like the 2020 Occupational Safety Code—highlights systemic vulnerabilities. For example, a February 2024 boiler explosion at an auto parts factory killed 14 workers, underscoring the risks of inadequate oversight in energy-related industries [4].

The solar sector’s operational risks extend beyond accidents. By 2024, India had already generated 100 kilotonnes of solar waste, projected to reach 600 kilotonnes by 2030 [2]. Informal recycling networks, often lacking safety protocols, handle most of this waste, exposing workers to hazardous materials like lead and cadmium [6]. A 2024 study in ScienceDirect notes that these workers face “increasing risks of workplace injuries and exposure to hazardous materials” as solar deployment scales [6]. Such conditions not only endanger laborers but also pose environmental liabilities, deterring foreign investors wary of reputational and regulatory risks.

Regulatory Uncertainties: Policy Shifts and Enforcement Gaps

Regulatory frameworks have struggled to keep pace with the sector’s expansion. The re-imposition of the Approved List of Models and Manufacturers (ALMM) in 2024 aimed to boost local manufacturing but introduced supply chain bottlenecks [1]. Similarly, the E-Waste Management Rules 2022 mandate responsible solar panel recycling but lack enforcement mechanisms, leaving the sector reliant on informal operators [2].

The Central Electricity Regulatory Commission’s rejection of a tariff for Solar Energy Corporation of India’s (SECI) first standalone battery energy storage system (BESS) project in 2024 further illustrates regulatory instability [3]. Such inconsistencies create uncertainty for developers, complicating long-term planning. Meanwhile, India’s 100% reliance on imported critical minerals like lithium and cobalt exposes projects to geopolitical and price volatility [3].

Strategic Investment Considerations

For investors, navigating these challenges requires a dual focus on risk mitigation and policy engagement.

1. Climate-Resilient Infrastructure: Developers must prioritize modular designs and decentralized systems to reduce exposure to extreme weather events and transmission delays [3]. For example, hybrid solar-storage projects could buffer against grid instability, though they require urgent regulatory support for viability [3].

2. Waste Management Innovation: Partnerships with formal recycling firms or technology providers could address the solar waste crisis. The government’s 2025 Quality Control Order, which mandates Bureau of Indian Standards (BIS) compliance for solar PV modules, offers a framework for integrating end-of-life considerations into project planning [5].

3. Advocacy for Regulatory Clarity: Investors should lobby for stable policies, such as extending the Inter-State Transmission System (ISTS) waiver to hybrid projects and streamlining PPA approvals [3]. Legal uncertainties, like the Karnataka High Court’s strike-down of Green Energy Open Access Rules, highlight the need for federal intervention to harmonize regulations [3].

4. Supply Chain Diversification: Given India’s dependence on imported minerals, investments in domestic critical mineral exploration or recycling technologies could reduce vulnerabilities. The government’s push for green hydrogen and energy storage also presents opportunities to diversify the renewable energy portfolio [6].

Conclusion

India’s solar sector remains a high-potential but high-risk investment. While policy initiatives like the PM Surya Ghar scheme and ALMM regulations signal commitment to growth, operational hazards and regulatory fragmentation persist. Investors must balance optimism with caution, prioritizing projects that align with both national climate goals and robust risk management. As the sector evolves, resilience—rather than mere scale—will define its long-term success.

Source:
[1] Major Events that Impacted the Indian Solar Sector in 2024, [https://mercomindia.com/major-events-indian-solar-sector-2024]
[2] The hidden impacts of India's solar boom, [https://www.fairplanet.org/story/the-hidden-impact-of-indias-solar-panel-surge-electronic-waste/]
[3] What's holding India back in its renewable energy transition?, [https://ieefa.org/resources/whats-holding-india-back-its-renewable-energy-transition]
[4] India 2024: Process Safety Crisis, [https://www.linkedin.com/pulse/india-2024-process-safety-crisis-thesafetymaster-tfxxc]
[5] Policy Shifts Impacting Solar Energy Development in India, [https://bharathisolar.com/policy-shifts-impacting-solar-energy-development-in-india-2025/]
[6] Exploring the whole systems energy injustices of solar, [https://www.sciencedirect.com/science/article/pii/S1040619024000617]