- In its new report, Mercom India says India added 456 MW new rooftop solar capacity in Q1 CY2022
- Installations were led by industrial segment, followed by commercial, residential and government segments
- Project margins declined on account of high component prices, BCD and GST, while average cost of a rooftop solar system increased by 17% YoY
- If the price rise continues, demand could be expected to contract in the short term
India’s total installed rooftop solar capacity at the end of March 2022 increased to around 7.6 GW with the addition of 456 MW in Q1 of calendar year (CY) 2022, according to Mercom India Research’s new report Mercom India Rooftop Solar Market Report Q1 2022.
“It was another great quarter for the rooftop solar market as post-Covid installations continued to surge. Rooftop installations have topped 400 MW for four quarters in a row, which is a first,” explained Mercom Capital Group CEO Raj Prabhu.
On annual basis, 456 MW was up 34% from 341 MW rooftop PV capacity added in Q1 CY2021 and on sequential basis the numbers increased 13% vis-à-vis 402 MW in Q4 CY2021, making the reporting quarter the 2nd highest for any quarter since Q2 CY2021, according to Mercom (see 10 GW New Solar Installed In India In 2021).
Most of the new installations between January 2022 and March 2022 were reported from the industrial segment at 47%, with commercial adding another 29%, residential 22% and government segment 2%. Prabhu points out that future growth will be dependent on system costs.
Growth in installations was registered even as the average cost of a rooftop solar system increased by 17% on annual basis. Overall project margins came down with component prices, basic customs duty (BCD) and the hike in goods and services tax (GST).
Prabhu warns that if the prices continue the upward march and project economics dwindle then the market can expect the demand to contract in the short term.
Capital expenditure (capex) model continues to make up most of the market share with 71% in the reporting quarter, followed by operating expenditure (opex) or renewable energy service company (RESCO) model.
Rooftop solar installations are highly concentrated in the country with top 10 states, led by Gujarat, accounted for close to 73% of the total. Maharashtra and Rajasthan followed next.
Complete report can be purchased from Mercom’s website.
Recently Mercom India said India’s total installed solar power capacity at the end of March 2022 increased to 52 GW with more than 3 GW added in Q1 CY2022 as utility scale accounted for 2.7 GW (see India Added 3GW+ Solar Capacity In Q1 CY2022).