Mercom Research Focus, Q2 2019, 1H 2019, India Solar Installations, India Solar Market, Renewables, Rooftop Solar, GST, Safeguard Duty, Modules, Export Import, Cumulative Solar Installations, Tariff Caps, Tender and Auction, State Installations, Utility-scale, New Power Addition

Solar installations in India in Q2 2019 witnessed a slight decline with 1,510 MW, a 14% quarter-over-quarter (QoQ) decrease compared to 1,761 MW installed in Q1 2019. Installations were down by 9% year-over-year (YoY) compared to 1,665 MW installed in Q2 2018, according to Mercom India Research’s newly released Q2 2019 India Solar Market Update.

1.5 GW of Solar Capacity Installed in India During Q2 2019

India added 3.2 GW of solar capacity in the first half of 2019 with large-scale projects making up 83% and rooftop installations accounting for 17%. Installations were down by 35%, compared to the 5.1 GW of capacity added in 1H of 2018.

Rooftop installations grew by 11% QoQ in Q2 2019 with 292 MW compared to 263 MW installed in Q1 2019. The rooftop market picked up slightly after elections. The rooftop installations fell by 30% YoY compared to 415 MW installed in Q2 2018.

“It has been a rough couple of quarters for the Indian solar market, exacerbated by tough lending conditions. Post elections, we expect the second half of the year to be slightly better, but liquidity issues need to be resolved for the market to recapture momentum,” commented Raj Prabhu, CEO, and co-founder of Mercom Capital Group.



The report attributes the drop in solar installations in Q2 2019 to a slowdown in rooftop solar installations and partial commissioning of solar projects.

According to the report, cumulative solar installations reached 31.5 GW by the end of Q2 2019 with large-scale solar projects accounting for 88% and rooftop solar making up the remaining 12%.

Mercom India Research forecasts India to install over 8 GW of solar capacity in the calendar year 2019. The report estimates solar installations in India to reach 70 GW by the end of 2022 based on current market dynamics.

Total power capacity additions in the first half of 2019 were 8 GW in India from all generation sources. Of this, renewable energy sources accounted for nearly 58% of installations, with solar representing 41% of new capacity and wind with 15%. Coal accounted for almost 42% of new capacity added.

Rajasthan was the top installer with newly added large-scale solar capacity in Q2 2019 followed by Madhya Pradesh, Andhra Pradesh, Tamil Nadu, and Gujarat. Large-scale solar installations were concentrated in five states, which made up 94% of the installed capacity in the quarter.

1.5 GW of Solar Capacity Installed in India During Q2 2019

 

“The Andhra Pradesh government’s move to renegotiate and revisit solar PPAs has rattled the industry and dampened investor sentiment. The industry is waiting for a ruling from the courts, which if successful, will remove uncertainty from the markets once and for all,” added Prabhu.

Tariff caps imposed by government agencies are also slowing down solar auction activity in the country. Developers are reluctant to bid at the levels prescribed by state agencies, instead of a market-based auction in which the lowest bid wins.

Land acquisition, transmission, and successfully securing approvals remain a challenge to commission large-scale projects on time.

Developers are also raising concerns about charges for forecasting and scheduling power during drastic changes in weather conditions.

Current Chinese module ASPs, including safeguard duty (which dropped to 20% after July 31, 2019), are now cheaper than Indian module ASPs in some instances. The project costs have also declined slightly in QoQ.

In 2010, cumulative solar installations in India was 12 MW, and now it is about 31 GW despite constant issues that have always be there in some form. Up and down cycles in the Indian solar market should be baked into business and marketing plans of companies doing business in India.

Key Highlights from the report:

  • Solar installations in India in Q2 2019 totaled 1,510 MW, a 14% decrease compared to 1,761 MW installed in Q1 2019
  • In Q2 2019, large-scale installations added up to 1,218 MW (81%), while rooftop installations accounted for 292 MW (19%)
  • Cumulative installed solar capacity in India stood at 31.5 GW by the end of June 2019. Of this, cumulative rooftop solar installations amounted to 3,816 MW.
  • Solar accounted for 41% of the new power capacity added in 1H 2019
  • Renewable energy capacity additions continue to increase at a significant pace in India, accounting for approximately 35.4% of India’s power capacity mix cumulatively
  • Solar electricity generation crossed 12 billion units (BUs) in Q2 2019
  • In Q2 2019, investments in the Indian solar sector totaled over $1.85 billion, 34% lower compared to investments made in Q1 2019

Get the full report: Mercom India Research’s Q2 2019 India Solar Market Update.

 

Image credit: Greenko