India marked a 53% quarter-over-quarter (QoQ) increase in rooftop solar installations in the second quarter (Q2) of 2021, the highest for any quarter, with 521 MW installations compared to 341 MW installed in Q1 2021.
The figures were revealed in Mercom India Research’s latest report, India Rooftop Solar Market Report Q2 2021.
In Q1 2021, rooftop solar installations had increased 8% compared to 285 MW added in Q4 2020.
A significant contribution came from Gujarat, where a large amount of residential rooftop solar projects were commissioned.
The year-over-year (YoY) installations rose 517% compared to 85 MW in Q2 2020.
In the first half (1H) of 2021, 862 MW of rooftop solar was added, a 210% increase compared to the same period last year. Installations in 1H had already surpassed the total rooftop solar capacity installed in 2020 (719 MW) when the COVID-19 lockdowns took their toll on the industry.
2021 could be the second-best year for rooftop solar after 2018 if the market has no other adverse COVID-19-related or other events in the second half (2H).
The report further states that installations were significantly higher than the previous Quarter despite the second wave of the pandemic and the state lockdowns. Since the lockdowns were targeted, the industry was well prepared, and installation activity was not affected much.
“The rooftop segment had a strong quarter, and demand is up. Finalizing the net metering cap at 500 kW has removed uncertainty for installers and paved the way for future growth. However, haphazard rooftop policies across states and a lack of support from distribution companies are holding back the sector from realizing its true potential to bring in new investment, create jobs and drive the clean energy economy forward,” said Raj Prabhu, CEO of Mercom Capital Group.
According to the report, cumulative rooftop solar installations reached 6.1 GW by the end of Q2 2021.
In Q2 2021, more than 130 MW of rooftop solar projects were tendered, a 69% QoQ decrease, albeit a 46% YoY increase. Major rooftop solar tenders were issued this Quarter by Madhya Pradesh Urja Vikas Nigam, Jharkhand Bijli Vitran Nigam, Haryana Renewable Energy Development Agency, and West Bengal Renewable Energy Development Agency.
Q2 2021 saw most rooftop solar installations in Gujarat, accounting for about 55% of the installed capacity. Maharashtra and Haryana rounded off the top three states for rooftop solar in Q2 2021.
The industry witnessed a surge of demand from commercial and industrial (C&I) consumers even during the lockdown from the second wave of COVID-19. The first half of the year could have been much stronger if not for the uncertainty around net metering regulations. With regulatory certainty in place, demand is expected to pick up, though with smaller-sized installations, noted the report.
According to the report, in Q2, average rooftop solar system costs increased 3% to ₹39.1 million/MW compared to ₹38 million/MW in Q1 2021. System costs have been rising since Q3 2020 due to increasing costs led by modules and other components, coupled with raw material shortages. Solar modules still make up for the majority of rooftop solar costs. Even with rising costs, consumers are realizing that solar is still cheaper than retail power tariffs.
There is significant concern over increasing costs compared to the prices quoted under state empanelment auctions. Failure or success of these installations will have a considerable impact on the future of the residential rooftop solar segment, noted the report.
Key Highlights from Mercom India Research’s India Rooftop Solar Market Report Q2 2021
- In Q2 2021, India added 521 MW of rooftop solar, an increase of 53% compared to 341 MW installed in Q1 2021. YoY installations rose 517% compared to 85 MW in Q2 2020
- In 1H 2021, India added 862 MW of rooftop solar, a 210% increase compared to the same period last year
- Cumulative installed rooftop solar capacity in India was about 6.1 GW at the end of Q2 2021
- In Q2 2021, the top 10 states accounted for approximately 83% of the cumulative installations
- The State of Gujarat had the most rooftop solar installations in Q2, followed by Maharashtra and Haryana.
- Rooftop installations in Q2 were the highest ever in a quarter
For the Complete Report, visit: https://mercomindia.com/product/q2-2021-india-rooftop-solar-market-update/
In Q2 2021, India added 2,488 MW of solar capacity, an increase of 19% quarter-over-quarter (QoQ) compared to 2,090 MW installed in Q1 2021. The figures were revealed in Mercom India Research’s latest report, Q2 2021 India Solar Market Update.
Rahul is a staff reporter at Mercom India. Before entering the world of renewables, Rahul was head of the Gujarat bureau for The Quint. He has also worked for DNA Ahmedabad and Ahmedabad Mirror. Hailing from a banking and finance background, Rahul has also worked for JP Morgan Chase and State Bank of India. More articles from Rahul Nair.