While large-scale installations dropped in India in 2018 by 23%, the much smaller rooftop solar was a bright spot growing 66% annually. However, in total the market declined 15.% YoY to 8.26 GW in 2018, according to Mercom. (Source: Mercom India Research)
- Mercom India Research’s annual numbers for solar PV capacity in India in 2018 shows 8.3 GW of new PV additions, declining 15.5% over previous year
- Large-scale solar installations registered a drop of 23% over previous year, but rooftop solar improved 66% in the same period
- Q4/2018 installations of 1.64 GW was up 3% QoQ, but 52% less than Q4/2017
- Total installed solar power capacity of the country at the end of 2018 was 27.9 GW
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Uncertainty caused through policy issues, such as the safeguard duty, goods and services tax (GST) introduction, and land and transmission issues, led to a 15.5% decline to 8,263 MW in 2018 over the 9,782 MW installed in 2017 in India (see India’s QoQ PV Addition In Q2/2018 Drops 52%).
In its Q4 & Annual 2018 India Solar Market Update, Mercom says that the 2018 decline was due to a 23% drop in large-scale installations that added up to 6,608 MW. However, the much smaller solar rooftop segment somewhat offset the decline in the utility solar segment as as it grew by an impressive 66% over previous year to 1,655 MW in 2018.
Total installed PV capacity of the country at the end of December 2018 reached 27.9 GW, as rooftop solar contributed 3.26 GW, representing 12% of the total. This growth is thanks to the commercial and industrial segment adopting rooftop solar at a higher rate. However, Mercom sees financing for rooftop solar as a challenge in 2019 as ‘Indian banks face a liquidity crunch with many banks hitting the exposure limits to the power sector’.
On a quarterly basis, Q4/2018 installations of 1.64 GW improved by 3%, but decreased by 52% over Q4/2017. Most large scale installations during Q4/2018 came from Andhra Pradesh, followed by Madhya Pradesh.
Five states – Karnataka, Rajasthan, Andhra Pradesh, Tamil Nadu and Maharashtra -accounted for 81% of large-scale installations in 2018. In all, Mercom says this was the first time solar accounted for more than 50% of new power capacity added in the country, however, investments in this sector saw a decline of 15% YoY.
“To succeed in the Indian solar market, companies need to play the long game. For the first time in India’s history, solar made up over 50% of new power capacity in 2018. We will continue to see a steady shift toward solar as prices continue to drop. This is going to be the new normal as coal plants continue to shutter,” commented Raj Prabhu, CEO and co-founder of Mercom Capital Group.
Like the rest of the world, India too won’t be immune to any changes in Chinese solar policy as an increase in Chinese installations could mean a tightening of solar products supplies and eventual price increase, while less Chinese demand would translate into oversupply and module price decline.
Talking about the issues project developers face in India, Prabhu said the government agencies have been tendering and auctioning capacity without ensuring availability of land and infrastructure, leaving it to the developers to do the necessary due diligence. This leads to delays and puts pressure on developers to finish their projects on time.
The report can be purchased on Mercom’s website.