India achieved a record-breaking annual installation of solar open access, adding 3.2 GW, in the calendar year (CY) 2023, a marginal increase from the 3 GW installed in the previous year, according to the recently published 2023 Q4 & Annual Mercom India Solar Open Access Market Report.

The exclusion of open-access solar projects from the Approved List of Models and Manufacturers (ALMM) order’s mandate, coupled with decreasing module prices, pushed commercial and industrial (C&I) consumers into accelerating their pending projects and entering into power purchase agreements.

Lower system costs, supportive policies like the implementation of Green Energy Open Access Rules in various states, and the lure of potential energy cost savings led to sustained growth in solar open access installations in 2023.

Priya Sanjay, Managing Director of Mercom India, said, “The exemption from ALMM, combined with a significant reduction in module prices, presents a strong incentive for renewable adoption. This substantial cost decrease not only fosters a favorable environment for existing players but also holds the potential to attract C&I consumers who are indecisive. We anticipate a robust market with sustained growth in 2024.”

Karnataka emerged as the frontrunner among the states, commanding a substantial 27.9% share of open-access solar capacity in 2023. Gujarat and Maharashtra followed with 16.4% and 16.2% shares, respectively.

The top five states collectively dominated the landscape, accounting for 84.1% of the total installations for the year.

According to Priya Sanjay, Karnataka’s conducive regulations, robust policy framework, disciplined DISCOMs, and vibrant industrial landscape, notably the expansive IT sector, drive substantial demand for open-access solar installations. “With companies embracing net-zero targets, there is consistent strong demand and impressive consumer offtake.”

In states like Odisha, Uttar Pradesh, and Chhattisgarh, a lack of awareness and state-specific hurdles are restricting the pace of open-access adoption.

On the other hand, industries with substantial carbon footprint, such as steel and cement, are driving a surge in demand for megawatt-scale power. The shift is not only towards standalone wind or solar but also round-the-clock renewables.

“Polluting sectors like aluminum, steel, cement, and iron are not only driven by domestic demand but also facing international pressure. With the introduction of CBAM in Europe mandating green practices, Indian companies exporting to these regions are compelled to report their carbon footprint. This regulatory shift is expected to generate a substantial increase in demand as industries adapt to global sustainability standards,” opined Priya Sanjay.

India witnessed a 22.8% quarter-over-quarter (QoQ) decline in open-access solar installations, totaling 831.2 MW in Q4 2023. However, this reflects a 6.2% YoY growth from the 782.5 MW recorded in Q4 2022.

The dip in QoQ installations can be attributed to lower PPA prices, leading to increased capacity additions YoY. Notably, developers completing projects in Q3 and signing new PPAs in Q4 are expected to drive a surge in capacity additions in the coming quarters.

As of December 2023, the cumulative installed solar capacity in the open access segment reached 12.2 GW.

Karnataka maintained its lead among states, contributing 33.1% to the country’s cumulative installations, followed by Maharashtra (13.5%) and Tamil Nadu (11.4%). The top five states collectively accounted for 72.2% of the nation’s cumulative open-access solar installations by the end of December 2023.

India had around 13.9 GW of projects under development and in the pre-construction phase at the end of Q4 2023.

In an encouraging development for open access projects, developers now have the alternative of proactively building projects ready for immediate renewable power supply. This transformative approach is expected to instill confidence in consumers, as they can secure power from projects that are already operational.

The “Q4 2023 Mercom India Solar Open Access Market Report” report is 85 pages long and covers vital information and data on the market. For the complete report, visit: https://www.mercomindia.com/product/q4-2023-mercom-india-solar-open-access-market-report