According to Mercom India Research’s newly released Q3 2019 India Solar Market Update, solar installations in India increased 44% in Q3 2019 reaching 2,170 MW, compared to 1,510 MW in Q2 2019. Installations were up by 36% year-over-year (YoY) compared to 1,592 MW in Q3 2018.
Solar installations in the first nine months (9M) of 2019 reached 5.4 gigawatts (GW), a decline of 19%, compared to 6.7 GW of added capacity in 9M of 2018.
In Q3 2019, large-scale installations totaled 1,925 MW compared to 1,218 MW in Q2 2019 and 1,157 MW installed in Q3 2018. The large-scale solar project development pipeline in India has increased to 22.6 GW. About 37.3 GW of solar have been tendered and were pending auction at the end of the quarter.
Rooftop solar installations declined by just 16% quarter-over-quarter (QoQ) in Q3 2019, totaling 245 MW compared to 292 MW in Q2 2019. Rooftop solar installations fell by 44% YoY compared to 435 MW installed in Q3 2018.
“Solar installations in Q3 2019 beat the downward trend seen over the past five quarters; however, we are revising our forecast down for 2019 as over 1 GW of projects have been delayed. The rooftop market continues to be weak amid a lack of financing and consistent regulatory issues,” commented Raj Prabhu, CEO and co-founder of Mercom Capital Group.
Total power capacity additions in 9M 2019 were 13 GW in India from all power generation sources. Of this, renewable energy sources accounted for nearly 56% of installations, with solar representing 41.4% and wind with 13.6%. Coal accounted for almost 44.1% of new capacity added in 9M 2019.
According to the report, India’s cumulative solar installations stood at 33.8 GW at the end of Q3 2019. However, rooftop installations still only made up 12% of total solar installations. The country has crossed 4 GW of cumulative rooftop solar installations and achieved only 10% of its target of 40 GW by 2022.
Mercom India Research revised its solar forecast down to ~7.3 GW of capacity additions in CY 2019 from the previous estimate of ~8 GW. This is a 12% decrease from 2018 installations of 8.3 GW. Mercom also estimates that for the first time, India will mark 10 GW of annual installations in CY 2020, assuming stable market conditions.
The report attributes the revision in the solar forecast for 2019 to a slowdown in rooftop solar installations, partial commissioning of large-scale solar projects, and over a gigawatt of projects that were scheduled to be commissioned in the third and fourth quarters being postponed to 2020.
Projects have been delayed or moved due to a number of issues, including: legal issues, land problems, execution delays, tariff approvals, AP state Issues – policy instability, and access to financing. Over 200 MW of projects are likely to be canceled due to delays in commissioning, which will result in companies losing their bank guarantees.
The rooftop solar market continues to be weak and installations dropped again in the third quarter of 2019. The overall slowdown in the economy and regulatory hurdles have been a drag on rooftop installations. Because of the liquidity crunch and worsening economic conditions, commercial & industrial (C&I) companies are struggling to finance rooftop projects.
Tamil Nadu was the top state for large-scale solar installations in Q3 2019, followed by Rajasthan and Karnataka. Large-scale solar installations were mostly concentrated in five states, which made up 96% of the installed capacity in the quarter.
“The pipeline of projects due to be commissioned in 2020 looks a lot stronger, and we should see the solar market resume year-over-year growth again. But a lot will depend on the economy getting back on track, which will affect lending and power demand,” added Prabhu.
Key Highlights from the report:
- Solar installations in India in Q3 2019 totaled 2,170 MW, a 44% increase compared to 1,510 MW installed in Q2 2019
- In Q3 2019, large-scale installations added up to 1,925 MW (89%), while rooftop installations accounted for 245 MW (11%)
- Cumulative installed solar capacity in India stood at 33.8 GW at the end of Sep 2019. Of this, cumulative rooftop solar installations crossed 4 GW.
- Solar accounted for 41.4% of the new power capacity additions in 9M 2019
- Renewable energy capacity additions continue to increase at a significant pace in India, accounting for approximately 35.7% of India’s cumulative power capacity mix
- Solar electricity generation crossed 10 billion units (BUs) in Q3 2019
- In Q3 2019, investments in the Indian solar sector were 11% lower compared to investments made in Q2 2019
Get the full report: Mercom India Research’s Q3 2019 India Solar Market Update.
Image credit: Adani Green Energy