India added 1.1 GW of rooftop solar capacity in the first half (1H) of calendar year (CY) 2024, the highest half-yearly installations to date, according to Mercom India’s newly released Q2 2024 India Rooftop Solar Market Report.

The capacity addition was about a 26% year-over-year (YoY) increase from the 873 MW installed in 1H 2023.

Rooftop solar capacity additions in the second quarter (Q2) of 2024 were unprecedented, with 731 MW, up 89% YoY from 388 MW. Sequentially, capacity additions grew by 99% from 367 MW.

Rooftop solar accounted for almost 15% of total solar installations in the quarter.

Residential rooftop solar projects largely drove the installation growth during 1H and Q2 of 2024 under the PM Surya Ghar: Muft Bijli Yojana. Residential installations surged nearly 923% quarter-over-quarter (QoQ), making up over 72% of the projects commissioned during the period.

“The residential sector’s contribution, historically overshadowed by the commercial and industrial (C&I) sector, soared, around ten-fold from the previous quarter,” said Priyadarshini Sanjay, Managing Director of Mercom India. She stressed the critical need to maintain the quality of installations, particularly in the residential sector, where homeowners often lack the expertise to assess the quality of the installations.

Projects under the capital expenditure (CAPEX) model accounted for nearly 84% of the capacity additions in Q2 2024, with the remaining under the operational expenditure or renewable energy service company (OPEX/RESCO) model.

The industrial segment contributed over 23% to the total installations, while the commercial and government segments accounted for 4% and 0.7%, respectively.

Gujarat, Maharashtra, Kerala, Uttar Pradesh, and Tamil Nadu were the leading states for rooftop solar capacity additions during the quarter, collectively contributing over 81% of the total installations.

As of June 2024, India’s cumulative installed rooftop solar capacity reached 11.6 GW. The top 10 states accounted for over 78% of this cumulative capacity, with Gujarat, Maharashtra, Rajasthan, Kerala, and Karnataka maintaining their leadership in installed capacity.

Kerala achieved the highest compounded quarterly growth rate, reaching nearly 9% between Q2 2023 and Q2 2024.

In Q2 2024, rooftop solar tenders totaling 533.6 MW were issued, about a 35% drop from 816.9 MW in Q1 2024 but a 259% increase from 148.6 MW in Q2 2023. Empanelment tenders for installing rooftop solar on government buildings comprised 38% of the quarter’s announcements.

The average cost of rooftop solar systems rose by over 12% QoQ, ending a six-quarter trend of declining prices, although costs were still down nearly 10% YoY. “After a year and a half of declining prices, module costs have begun to rise again, with DCR modules remaining more expensive due to high demand and limited supply,” Sanjay said.

Manufacturers are ramping up their DCR module production capacity, but procuring locally manufactured cells has been a challenge.

Sanjay also expressed concern over the likelihood of future shortages for other critical components, such as inverters and cables, which could impact installations in the coming quarters. “The implementing agencies have to periodically assess the market to ensure there are no serious demand-supply gaps affecting installations drastically.”

The report also includes a comprehensive analysis of net metering policies across all Indian states and Union Territories.

The Q2 2024 India Rooftop Solar Market Report is 56 pages long and covers all facets of India’s rooftop solar market. For the complete report, visit: https://www.mercomindia.com/product/rooftop-solar-market-report-q2-2024