Caption: While 1,359 MW of open access solar power capacity was installed in India in Q1/2018, consultancy Bridge to India expects average annual capacity additions of 690 MW till 2022 when this segment is estimated to add up to a total of 5,695 MW. (Source: Bridge to India Research)
- Bridge to India’s India Solar Open Access Market 2018, August edition says the market segment reached a cumulative installed capacity of 2.89 GW by March 2018
- A total of 1,359 MW was installed during Q1/2018 and is the only period since 2013 when 1 GW milestone was crossed
- Karnataka with its once friendly open access solar policy that expired at the end of March 2018 has been responsible for most of the capacity additions in this segment in India
- By 2022, this segment is expected to have a total capacity installation of 5,695 MW
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At the end of March 2018, the cumulative installed capacity of open access (OA) solar in India was 2,894 MW, with the largest volume deployed in Karnataka. In its August 2018 report titled India Solar Open Access Market 2018, clean energy consultancy Bridge to India (BTI) lists the benefits of open access (OA) solar. It not only offers freedom for consumers to choose from among competing power sources at mutually agreed terms, it also ends the dominance of conventional distribution companies in power supply.
Yet, despite the benefits it offers, OA solar makes up only 12% of total solar power capacity in India. Still, Q1/2018 was the first quarter since 2013 to see OA solar installing over 1 GW capacity – it reached 1,359 MW, with third party sales projects accounting for the largest share. This increase in just one quarter was thanks to Karnataka’s attractive state policy that expired at the end of March 2018.
Of the total 2,894 MW installed in this segment, Karnataka had the highest share of 1,592 MW, followed by Madhya Pradesh with 332 MW, Telangana with 322 MW, Andhra Pradesh with 208 MW and Tamil Nadu with 164 MW.
The challenges in this segment come from frequent changes in OA charges, difficulty in obtaining project approvals and most importantly, resistance from DISCOMs and other state agencies. “Unfortunately, unpredictability in regulatory environment is expected to continue so long as the DISCOMs lose revenue from OA because of incorrect calibration of OA charges and ad hoc waivers provided under state policies,” point out authors of the report.
By the end of 2022, BTI estimates OA capacity to grow to 5,695 MW, registering annual capacity additions of 690 MW. Andhra Pradesh, Uttar Pradesh and Haryana with their transparent policy regime and attractive OA charge exemptions are expected to lead this market segment. Roll back in incentive schemes in established OA markets Karnataka and Madhya Pradesh will slow down this segment here.
OA power was given the green light in India’s Electricity Act 2003. It aims to end monopoly of distribution companies over power supply and allow consumers the freedom to choose from competing power sources at mutually agreed terms. According to BTI, Commercial and industrial (C&I) customers account for 51% of total power consumed in the country. DISCOMs supply bulk of this power. The long-term OA market accounts for only 4%, the net share of OA solar in total C&I power consumption is only 0.5%.
The full India Solar Open Access Market 2018 report is for purchase on the website of BTI.