India added 1.6 GW of rooftop solar capacity in the calendar year (CY) 2022, nearly a 4% decline year-over-year (YoY), compared to 1.7 GW in 2021, according to Mercom India Research’s newly released 2022 Q4 & Annual Mercom India Rooftop Solar Market Report.

The industrial sector accounted for approximately 42% of all installations during the year. Residential, commercial, and government sectors made up 32%, 25%, and 1% of installations, respectively.

In the fourth quarter (Q4) of 2022, India’s rooftop solar installations increased by almost 51% quarter-over-quarter, adding 483 MW compared to 320 MW. This represents a YoY growth of 20%.

Cumulative rooftop solar installations stood at nearly 8.8 GW as of December 2022.

“2022 was a lost opportunity for the rooftop solar market in India, affected by policy challenges restricting supply and impacting the cost of modules. Despite the hurdles, installations were almost on pace with the previous year. Strong fundamentals continued to drive installations in the commercial and industrial segments. We expect growth to resume in 2023 as pricing and supply challenges moderate,” said Raj Prabhu, CEO of Mercom Capital Group.

 

The average rooftop solar system cost decreased by 0.4% QoQ but surged by nearly 13% YoY.

In 2022, over 2 GW of rooftop solar tenders were issued, representing a 90% YoY increase. Madhya Gujarat Vij Company accounted for nearly 47% of the announced tenders, while government agencies in Madhya Pradesh, Rajasthan, Uttar Pradesh, and Telangana accounted for 23%.

Power distribution companies issued empanelment tenders in Kerala, Punjab, Gujarat, Uttar Pradesh, Madhya Pradesh, Telangana, and Karnataka under Phase II of the Ministry of New and Renewable Energy’s rooftop solar program during the year.

The government implemented significant policy changes in the sector during the year, including the imposition of Basic Customs Duty (BCD) and the Approved List of Models & Manufacturers (ALMM) mandate for rooftop solar projects. These policies added to the volatility in solar module prices and availability in the market.

Installations could have been higher if project costs had not risen due to the BCD on modules and if installers had clarity about the grid-connected rooftop solar projects requiring ALMM-enlisted modules.

Gujarat had the highest share of cumulative rooftop solar installations at 24%, followed by Maharashtra at 14% and Rajasthan at 9%.

The top 10 Indian states together accounted for approximately 74% of cumulative rooftop solar installations as of December 2022 and over 85% for the entire year.

Between Q4 CY21 and Q4 CY22, Kerala recorded the highest compounded growth rate of 19%, followed by Maharashtra and Andhra Pradesh.

A comprehensive analysis of the net metering policies across all Indian states and Union Territories is also included in the report.

The 2022 Q4 & Annual Mercom India Rooftop Solar Report is 60 pages and covers all facets of India’s rooftop solar market. For the complete report, visit:  https://mercomindia.com/product/rooftop-solar-market-report-q4-2022