India added over 1.8 GW of solar open access capacity in the first quarter (Q1) of the calendar year (CY) 2024, a nearly 152% increase year-over-year (YoY) compared to 722 MW, according to the newly released Q1 2024 Mercom India Solar Open Access Market Report.

The installations also represent a two-fold quarter-over-quarter (QoQ) increase from 909.3 MW.

Falling module prices drove the rise in installations due to surplus production in China and the suspension of the Approved List of Models and Manufacturers order for projects commissioned until March 2024. This allowed developers to import modules and commission projects at a reduced cost.

Many developers delayed their module procurement until Q4 2023, anticipating lower prices, and commissioned projects in Q1 2024, significantly increasing installations. Additionally, lower power purchase agreement (PPA) prices, due to reduced project costs, further encouraged consumers to adopt solar open access.

“There is a huge demand for open access solar because most corporations have their carbon emission reduction targets. Many state governments are coming up with green energy policies and offering charges waivers,” commented Priya Sanjay, Managing Director at Mercom India.

In Q1 2024, Rajasthan led the way in solar open access capacity additions, accounting for nearly 28% of the installations. Andhra Pradesh and Maharashtra followed, contributing 21% and almost 12% respectively.

As of March 2024, the total installed solar open access capacity reached 14.3 GW.

Karnataka remained the leading state, accounting for nearly 30% of the cumulative installed capacity. Maharashtra and Tamil Nadu followed with 13% and 11% respectively.

The project pipeline, including those under development and in the pre-construction stage, stood at over 18 GW as of March 2024. Nearly 74% of these pipeline projects were located in Karnataka, Rajasthan, Maharashtra, Tamil Nadu, and Andhra Pradesh.

According to Sanjay, these states have a high percentage of projects under development because of conducive policies and low landed cost. These states also have better land and infrastructure availability.

“Policies need to make economic sense ultimately; the landed cost should be far lower than the grid price, and approvals should be seamless. Preferably there must be consumers within the state who can procure this power,” she said.

Adani Hybrid Energy emerged as the top seller in the Green Day-Ahead Market (G-DAM), accounting for approximately 14% of the electricity sold. Arcelor Mittal was the leading buyer, purchasing around 36% of the electricity from G-DAM.

The volume of renewable energy certificates traded on the Indian Energy Exchange (IEX) increased by over 133% QoQ. The volume traded in the Green Term Ahead Market on IEX rose by 14% QoQ.

“There has been a rise in both RECs and the G-TAM market, driven by demand. Many companies, especially those signed up for the RE100 initiative or those without consistent power demand, go for the exchange route. The exchange is the best option for them to get green energy without committing to a long-term PPA,” Sanjay said.

The report analyzes the solar open access market, retail electricity tariffs, PPA prices, and open access charges and costs across seventeen states.

The demand for open access power in India will remain high, driven by initiatives like RE100, responsible steel, and green cement. “For larger corporations, green targets are serious, and while price is a concern, policies and approvals are crucial. They may also look at green carbon credits and RECs to fully meet RE100 goals,” she said.

The “Q1 2024 Mercom India Solar Open Access Market Report” report is 82 pages long and covers vital information and data on the market. For the complete report, visit: https://www.mercomindia.com/product/q1-2024-mercom-india-solar-open-access-market-report