88% YoY Increase In Indian Solar Installations In Q1/2021

Mercom India Research: India Installed 2.05 GW New Solar Power Capacity In Q1/2021; COVID-19, Rising Module Costs & Policy Restrictions To Impact Annual Additions For 2021, Forecasted At 7 GW

88% YoY Increase In Indian Solar Installations In Q1/2021

Despite more than 2 GW of new solar capacity having come up in India during Q1/2021, Mercom sees the 2nd and much more devastating COVID-19 wave pushing back project completion deadlines, and expensive modules dampening the country’s solar growth in the near term. (Source: Mercom India Research)

  • According to Mercom India Research, India installed 2.05 GW new solar PV capacity during Q1/2021
  • Large scale solar led the deployments with 1.75 GW, followed by 307 MW of rooftop solar
  • For 2021, analysts expect around 7 GW annual additions as the country braves 2nd wave of COVID-19 amid rising module prices

India increased its annual solar power installations for Q1/2021 by 88% to add 2.056 GW of new capacity, as it was recovering from the impacts of the 1st wave of COVID-19 in the country. It is also a sequential improvement of 37%, according to the Q1/2021 India Solar Market Update of Mercom India Research.

The Indian clean energy consultancy claims Q1/2021 additions were the highest for any quarter in the country since Q3/2019, taking India’s total installed PV capacity to 41 GW. In Q1/2020, Mercom had said India’s solar installations added up to 1.08 GW as lowest quarterly additions since Q4/2016 (see India: Q1/2020 Solar Installations Decline 39% YoY).

Most of this capacity came from large scale solar projects with 1.749 GW, and 307 MW of rooftop solar installations. Rajasthan, Uttar Pradesh, Gujarat and Andhra Pradesh were among the top 5 states that contributed 81% of all solar capacity installed during the reporting quarter.

However, Rajasthan, Uttar Pradesh and Maharashtra are the states with long lockdowns during the 2nd and much more devastating wave of the pandemic which the report writers believe will significantly impact installations in 2021.

With projects timelines expected to be pushed under the current situation as projects face labor and component availability, Mercom forecasts close to 7.1 GW of total solar installations during calendar year (CY) 2021 for India while offering a detailed analysis on best, medium and worst-case scenarios. This is a downward revision of its previous forecast offered in February 2021 for 2021 additions to lock in over 10 GW capacity (see Mercom: India Installed 3.2 GW Solar In CY 2020).

While pointing at the growing demand for rooftop solar as businesses see it as a way to bring down their operating expenses especially during the pandemic, the report counts rising prices of modules as a deterrent.

“The solar industry is grappling with how to move forward amid so much uncertainty. Bidding for auctions in the future will be extremely challenging, and developers must give themselves a lot of room to factor in the risks and price volatility,” explained Mercom Capital Group’s CEO Raj Prabhu. “This is the first time we have seen module prices rise 4 quarters in a row in the last 5 to 6 years. Bidding low in anticipation that module prices will perpetually fall is an extremely risky strategy in today’s market.”

Policy restrictions and duties have added to the price rise and unpredictability, he added.

What’s heartening is that there is 53.6 GW of large scale project development pipeline, along with 24.1 GW of projects tendered and pending auction at the end of March 2021.

Recently, another market research firm JMK Research said India installed 5.5 GW of new solar PV capacity in FY2021, between April 2020 and March 2021 (see India PV News Snippets: JMK Research, CRISIL, DGTR).

About The Author

Anu Bhambhani

Anu Bhambhani is the Senior News Editor of TaiyangNews. Anu is our solar news whirlwind. At TaiyangNews she covers everything that is of importance in the world of solar power.

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