India installed 367 MW of rooftop solar capacity in the first quarter (Q1) of 2024. This accounts for a 10% quarter-over-quarter (QoQ) decrease from 406 MW and a 24% year-over-year (YoY) drop from 485 MW, according to Mercom India’s newly released Q1 2024 India Rooftop Solar Market Report.

Capacity additions for the quarter declined because many residential consumers postponed their installations, anticipating the benefits of the PM Suryaghar: Muft Bijli Yojana, which doubled the central subsidy by ₹12,000 (~$144) to ₹24,000 (~$288) for systems between 1 kW and 3 kW.

The program’s launch resulted in a surge of applications within a month, which caused technical issues in processing applications, leading to installation delays.

Mercom India’s Managing Director Priya Sanjay commented, “One segment driving the growth was residential, especially in states like Gujarat, Maharashtra, Karnataka, and Kerala, which had their own rooftop solar programs. We expected residential solar to pick up in Q1, but that wasn’t the case, unfortunately.”

The sudden surge in demand led to component shortages across the country.

“The increase in prices for modules meeting the domestic content requirement (DCR) significantly impacted capacity additions under the SURYA Gujarat program, further affecting the quarterly capacity growth,” Priya Sanjay said.

The industrial segment dominated the quarterly capacity additions, making up nearly 57% of the installations. The commercial, residential, and government segments contributed approximately 28%, 14%, and 1.1% of the capacity additions.

Sanjay said, “The government segment faces unique challenges. While tenders are issued, there is limited installer interest due to factors like long approval processes, need for feasibility study and structure enhancement, especially with older buildings.”

The financial challenges of C&I consumers in adopting rooftop solar panels have been reduced with numerous financial instruments available.

The main challenge lies in awareness and access to solution providers, according to Sanjay. “We get several inquiries from potential consumers at our Clean Energy Meets. Queries about whether one should go for rooftop or open-access are common.”

Gujarat, Maharashtra, Haryana, Kerala, and Karnataka were the leading states in adding rooftop solar capacity during the quarter. Together, these top five states accounted for over 67% of the installations for the quarter.

Sanjay said, “Kerala successfully implemented its residential rooftop solar program, while Gujarat boasts one of the most attractive policies for rooftop solar.” The two states would have achieved their targets if not for the shortage of DCR models.

“DISCOMs show a keen interest in promoting residential rooftop solar installations due to the subsidized nature of this segment,” she added.

By March 2024, India had a total installed rooftop solar capacity of 10.8 GW. Gujarat, Maharashtra, Rajasthan, Kerala, and Karnataka remained the top states for cumulative rooftop solar capacity. The top 10 states collectively accounted for over 77% of rooftop solar installations.

In Q1 2024, rooftop solar tenders totaling nearly 817 MW were issued, a 48% increase from approximately 553 MW in Q4 2023 and a 141% rise from over 338 MW in Q1 2023.

The average cost of rooftop solar systems decreased for the sixth consecutive quarter, dropping by more than 6% compared to the previous quarter and nearly 22% compared to the same period last year.

The Q1 2024 Mercom India Rooftop Solar Report is 73 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-q1-2024