In the first quarter (Q1) 2023, 485 MW of rooftop solar capacity was added, up 0.4% compared to 483 MW in Q4 2022. In a year-over-year (YoY) comparison, installations were up 6.4%.

The findings were published in Mercom India Research’s newly released Q1 2023 Mercom India Rooftop Solar Market Report.

“After an up and down year in 2022, we are beginning to see steady growth in rooftop solar driven by solid fundamentals. With system costs beginning to trend downwards, we anticipate an accelerated growth trajectory in the coming quarters,” said Raj Prabhu, CEO of Mercom Capital Group.

The increase in capacity was attributed to the rapid growth of installations in states like Gujarat, Kerala, and Karnataka in the report. The commissioning of pending projects after the Ministry of New and Renewable Energy clarified the Approved List of Models and Manufacturers regulation in October last year also contributed to the installation numbers.

Rooftop solar installations comprised 26% of the total solar installations in Q1 2023.

“The installations in the current quarter were similar to those of the previous quarter, with a significant number of installations originating from the residential segment,” said Priyadarshini Sanjay, Managing Director of Mercom India.

In Q1 of 2023, residential consumers contributed nearly 58% of the added capacity, while industrial and commercial consumers accounted for 28% and 14%, respectively.

The average rooftop solar system cost during the quarter was 6% lower than the preceding quarter, whereas, on a YoY comparison, the average system cost increased marginally.

 

Gujarat, Kerala, and Karnataka added the most rooftop solar capacity during the quarter, contributing to almost 70% of the capacity additions.

Between Q1 2022 and Q1 2023, Kerala recorded the highest compounded growth of over 21%, followed by Karnataka and Andhra Pradesh.

Ms. Sanjay added, “States such as Gujarat, Kerala, and Karnataka played a prominent role in driving residential installations. The Ministry of New and Renewable Energy (MNRE) has implemented a residential rooftop program with specific targets for distribution companies (DISCOMS). These DISCOMS are required to adhere to deadlines set by the program, which has resulted in a substantial increase in residential rooftop solar installations. Also, states like Kerala and Karnataka have implemented dedicated programs promoting residential installations.”

During the quarter, the tender activity declined 75% YoY and increased by 47% compared to the previous quarter. Kerala’s power distribution company and Telangana’s renewable energy development agency contributed around 31% and 15% to the tendered capacity.

About 188 MW of empanelment tenders were floated in Q1 2023 by Kerala, Telangana, Jharkhand, and entities, including the Ministry of Railways and Solar Energy Corporation of India.

 

By the end of the first quarter of 2023, India’s total cumulative rooftop solar capacity reached around 9.3 GW.

As of March 2023, Gujarat remained the top state for rooftop solar installations, representing approximately 24% of the total cumulative capacity. Maharashtra and Rajasthan followed closely.

The top 10 states collectively accounted for approximately 75% of the total cumulative rooftop solar installations as of March 2023.

Ms. Sanjay explained that states like Gujarat and Maharashtra have emerged as leaders in rooftop solar installations due to their favorable and enabling policies and applauded the “forward-thinking” approach of Gujarat DISCOMS, who have established substantial self-imposed targets. The proactive approach has led to faster installations in the state. Gujarat’s streamlined approval processes and efficient disbursal of subsidies have also contributed to the accelerated progress of rooftop solar projects.

When asked what needs to be done to ensure India reaches its 40 GW rooftop solar target, the Mercom India MD pointed to increasing consumer awareness about the financial benefits as vital.

Approximately 64% of the rooftop solar installations during the quarter were financed by the capital expenditure (CAPEX) approach, while the remaining 36% adopted the operating expenditure/renewable energy service company (OPEX/RESCO) method.

Mercom India’s rooftop solar report includes further analysis and comprehensive details, including the net metering policies across all Indian states and Union Territories.

The Mercom India Rooftop Solar Report Q1 2023 is 58 pages and covers all facets of India’s rooftop solar market. For the complete report, visit: https://www.mercomindia.com/product/rooftop-solar-market-report-q1-2023