Q1 2017 INDIA SOLAR MARKET UPDATE – Installations Forecast to Grow 130%
The Indian solar sector witnessed strong growth with cumulative installations reaching approximately 12.8 GW at the end of Q1 2017.
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The Indian solar sector is witnessing strong growth with cumulative installations reaching approximately 12.8 GW at the end of Q1 2017. Utility-scale projects account for about 12 GW while rooftop installations accounted for almost 850 MW of the installed capacity. The Q1 India Quarterly Market Update forecasts 2017 installations to reach approximately 10 GW, a ~130 percent increase year-over-year compared to 4.3 GW installed last year as India becomes one of the top solar markets in the world after China and the United States. The pipeline of Indian utility-scale projects is currently ~12.6 GW and there are approximately 6.4 GW of tenders pending auction.
Six states now have installed capacity of over 1 GW.
Extremely competitive reverse auctions fueled by pent-up demand from slowing tender and auction activity are continuing to drive bids to record low levels. Solar tariffs have declined by ~75 percent since 2010. In the recently conducted 250 MW Kadapa Solar Park auction in Andhra Pradesh, bids reached a new record low of ₹3.15 (~$0.048)/kWh, following the Rewa Solar Park auction in Madhya Pradesh, where bids reached ₹3.30 (~$0.494)/kWh (levelized tariff over 25 years), over a rupee lower than the previous low tariff of ₹4.34 (~$0.065)/kWh (recorded in the state of Rajasthan in January 2016).
Tender and auction activity has been slowing down over the last couple of quarters. According to Mercom’s India Solar Project Tracker, only about 1.9 GW of solar was tendered in Q1 2017 (1 GW of this was retendered), compared to 3.4 GW in Q4 last year. There were 1.3 GW of solar projects auctioned in Q1 2017, compared to 255 MW in Q4 2016. The slowdown in activity has been disconcerting to developers and manufacturers that have been positioning for much higher levels of activity based on India’s solar installation goal of 100 GW by 2022.
Chinese module prices in India have continued to slide with average selling prices coming to $0.32 (~₹20.68)/W in the first quarter of 2017 an 11 percent decrease from $0.36 (~₹23.27)/W in Q4 2016. Chinese module prices have now fallen by about 33 percent in the last 12 months enabling the recent low bids of ₹3.30 (~$0.05)/kWh in Rewa and ₹3.15 (~$0.048)/kWh in Kadapa.
Rooftop installations in India have totaled nearly 850 MW as of Q1 2017. The government is targeting 40 GW by 2022 through rooftop installations, but policy support currently is minimal. Over 20 states have some net-metering policy, but few have a functioning net-metering program. Other issues affecting rooftop installations include lower accelerated depreciation, and the removal of the 10-year income tax holiday.
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– Market Demand Forecast
– Installation and Forecast by Market Segments
– Development Pipeline by States
– State and National Incentive and Policy Updates
– Solar Tenders and Auctions
– Market Share Rankings
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