In calendar year (CY) 2021, India added 1.7 GW of rooftop solar, the highest-ever recorded in a calendar year. Installations were up 138% compared to 2020, according to Mercom India Rooftop Solar Market Report Q4 and Annual 2021.

In 2021, the residential and commercial segments accounted for 35% and 33% of installed rooftop solar capacity. The industrial segment accounted for 26% of the total installations, and the government segment accounted for 6%.

The country added 402 MW of new rooftop installations in the fourth quarter (Q4) of CY 2021, marking a 10% drop quarter-over-year (QoQ) compared to 448 MW in Q3 CY 2021.

However, the installations during the quarter increased by 41% year-over-year (YoY) in comparison to Q4, 2020.

According to the report, in Q4 2021, rooftop solar installations accounted for 15% of the total solar installations in the country.

Out of the total installed capacity in Q4 2021, the commercial segment accounted for 44% of the total installations, followed by the industrial, residential, and government sectors, with 41%, 10%, and 5%, respectively.

“The rooftop market had its best year, largely due to the pent-up demand from 2020, which experienced a severe decline due to the Covid-19 pandemic. Certainty around the net metering policy helped with consumers’ demand across all segments– residential, industrial, and commercial- were responsible for the growth in installations. An increase in component costs will dent demand in 2022, but we still expect positive growth this year,” said Raj Prabhu, CEO of Mercom Capital Group.

As per the report, at the end of December 2021, rooftop installations in the country reached 7 GW.

The price rise of components, commodities and raw materials also affected the demand during the year. The increase in goods and services  (GST) tax was a huge blow to installers. If not for the policy uncertainties and market volatility, the installations could have been higher.

In 2021, over 1 GW of solar tenders were issued, marking an increase of 56% YoY. The Kerala State Electricity Board accounted for 27% of the announced tenders, and distribution companies in states like Maharashtra, Jharkhand, West Bengal, and Karnataka accounted for 29%.

In Q4 2021, tenders for rooftop solar projects increased 70% compared to Q3 2021. The tendering activity rose 48% compared to the same period in 2020.

Out of the tendered capacity in Q4 2021, 56% were announced by the Maharashtra State Electricity Distribution Company Limited (MSEDCL) and 11% by the Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA). Other agencies floated nearly 24% of the tenders.

The report states that the distribution companies (DISCOMs) issued tenders in Kerala, Punjab, Gujarat, Uttar Pradesh, Jharkhand, Haryana, West Bengal, Tripura, and Karnataka under Phase-II of the Ministry of New and Renewable Energy (MNRE) rooftop solar program during 2021.

Among the states, in terms of cumulative installations, Gujarat led the way with 27% of the total installations, followed by Maharashtra and Rajasthan with 14% and 10%, respectively.

At the end of Q4 2021, the top ten states accounted for 83% of the total cumulative installations.

From Q4 2020 to Q4 2021, Maharashtra registered the highest compounded growth at 26.7%, followed by Uttarakhand and Haryana with 26.6% and 24.7%, respectively.

In Q4 2021, ₹232.19 billion (~$3.1 billion) was invested in the solar sector, of which about ₹16.88 billion (~$225 million) went into the rooftop solar segment, which marked a 7% QoQ decline compared to ₹18.07 billion (~$240 million) invested in Q3 2021.

2021 was a bounce-back year for the rooftop segment, beginning with the clarity provided by the Ministry of Power capping net metering at 500 kW. After that, several states such as Chhattisgarh, Karnataka, Punjab, Gujarat, Rajasthan, Kerala, Haryana, Tamil Nadu, and West Bengal came up with their respective state policies that bolstered the industry sentiment.

The report also includes a comprehensive analysis of the net metering policies in all the states and union territories.

Key Highlights from Mercom India Rooftop Solar Market Report Q4 & Annual 2021:

• In CY 2021, India added 1.7 GW of rooftop solar capacity, the highest in any calendar year to date
• Cumulative rooftop solar installations are over 7 GW as of Q4 2021
• The top 10 states accounted for 85% of the total rooftop solar installations in CY 2021
• In Q4 2021, 44% of rooftop solar installations came from the commercial segment, followed by 41%, 10%, and 5% in the industrial, residential, and government segments
• In Q4 2021, 68% of total rooftop solar installations were under the CAPEX model, while installations under the OPEX/RESCO models contributed to the remaining 32%
• Gujarat was the top state for cumulative rooftop solar installations, followed by Maharashtra and Rajasthan
• YoY rooftop solar system costs have increased by 14.75%

The Mercom India Rooftop Solar Market Report Q4 and Annual 2021 is 55 pages and covers all facets of India’s rooftop solar market. For the complete report, visit: https://mercomindia.com/product/q4-2021-india-rooftop-solar-market-report