India added 2,835 MW of solar capacity in the third quarter (Q3) of the calendar year (CY) 2021, increasing by 14% compared to 2,488 MW installed in Q2 2021. The figures marked a massive 547% year-over-year (YoY) surge, according to Mercom India Research’s recently released report Q3 2021 India Solar Market Update.

As per the report, in 9M 2021, India added over 7.4 GW of solar capacity, an increase of 335% compared to 1.73 GW in 9M 2020.

The cumulative installed capacity at the end of Q3 2021 stood at 46.6 GW.

The figures acquire greater significance because installations grew despite various market challenges. Ongoing projects have been burdened by the increase in raw material prices and a sudden spike in freight charges in recent months.

Solar module prices have been spiraling for quite some time. According to the report, module prices have increased for the sixth consecutive quarter, something not seen in the past ten years.

“Despite supply challenges, the Indian solar market is headed towards one of the best years on record, and a complete turnaround from 2020, which was one of the worst years for solar due to COVID-19,” said Raj Prabhu, CEO of Mercom Capital Group. “We expect a strong 2022 despite the high price of components and uncertainties surrounding the Great Indian Bustard related transmission issue in Rajasthan. An increase in GST, curtailment, and payment issues are adding to the challenges facing developers and constraining growth.”

The quarter also saw the largest QoQ increase in large-scale system costs by over 10%, attributed to the increase in raw material and component prices.

“Manufacturing capacity ramp-up continues at a brisk pace as domestic producers look to take advantage of the 40% basic customs duty scheduled to be imposed from April 2022. In the second quarter of next year, we can expect to see procurement strategies starting to change drastically as imports become expensive,” added Prabhu.

Rajasthan remained the top state for the third consecutive quarter by contributing 63% of the total large-scale solar installations in the country. As of September 2021, the top 10 states accounted for about 96% of the country’s cumulative large-scale solar installations.

According to the report, India added close to 11.6 GW of power capacity in 9M 2021. Solar dominated capacity additions, accounting for close to 60%, followed by thermal power, which contributed 21%. Renewables (including large hydro) made up 79% of total power capacity additions in 9M 2021.

Key Highlights from Mercom India Research’s Q3 2021 India Solar Market Update:

• In Q3 2021, India added 2,835 MW of solar, an increase of 14% compared to 2,488 MW installed in Q2 2021. YoY installations rose 547% compared to 439 MW in Q3 2020
• In 9M 2021, India added 7.4 GW of solar, a 335% increase compared to the same period last year
• Project costs increased over 10% QoQ, the largest increase to date
• Rajasthan is now the top state for solar in India
• Solar dominated power capacity additions by accounting for close to 60% in 9M 2021
• Investments into the solar sector increased by almost 50% QoQ

For the complete report, please visit: https://mercomindia.com/product/q3-2021-india-solar-market-update