Several solar power projects delayed due to the COVID-19 pandemic related challenges in 2021 in India came online in 2022 taking the country's annual PV installations in CY2022 to 13 GW. That's a 27% annual increase, according to a new report from Mercom India Research.
While this is a new annual high for India, Mercom India's parent Mercom Capital Group CEO Raj Prabhu said it is not even close to 27 GW the country needs to install annually to meet its 280 GW target by 2030. "Policies must be quickly retooled and hurdles removed to double the annual pace of installations and attract the needed investments," he explained.
Additions in Q4/2022 added up to 2.6 GW representing a quarterly dip of 2.5%, and 5% drop on annual basis. Rooftop solar installations declined 3.7% YoY.
Higher module prices and supply constraints increased average cost of projects throughout CY22. "Average large-scale project costs in Q4/2022 increased by 7.3% making it an unprecedented 10 quarters of project cost increases in a row," according to analysts of Mercom report 2022 Q4 & Annual India Solar Market Update.
Even though tender volume increased 23% YoY, auctions declined 29% as Mercom blames imposition of Basic Customs Duty (BCD) and shortage of modules enlisted under Approved List of Models and Manufacturers (ALMM) for the latter.
Mercom counts 87% of India's cumulative installed solar PV capacity of 63 GW to comprise large-scale projects that increased 33% annually.
Overall, solar PV accounted for 82% of India's new power capacity added in 2022 and it also accounts for 15% of India's total installed power capacity. At the end of December 2022, the country's installed renewable energy capacity, including hydropower stands at 167 GW, representing 41% of the national energy mix.
India's large scale solar project pipeline now stands at 58 GW with another 51 GW tendered and pending auction.
Looking into the trend of installations in 2023, Mercom sees the future fraught with challenges including higher costs of projects, pending judgement on projects stranded in the Great Indian Bustard region, and the Ministry of New and Renewable Energy's (MNRE) decision on project extensions, among others.
The report can be purchased from Mercom's website.
Earlier, another market intelligence firm in India JMK Research & Analytics also counted India to have installed 13.95 GW new solar PV capacity in 2022 (see India Installed Close To 14 GW New Solar Capacity In 2022).