With the addition of 9.6 GW of new solar capacity, 2017 was a banner year for solar in India. At the end of the year, India’s cumulative solar installations stood at 19.6 GW with utility-scale installations making up about 90% of the total with 17.9 GW.

Telangana became the first Indian state to achieve more than 3 GW of cumulative solar capacity in 2017 after it added approximately 695 MW of solar installations during the fourth quarter alone. Karnataka grabbed the number two spot in cumulative solar installations with 2.8 GW after adding approximately 950 MWs during the fourth quarter.

Cumulative solar installations in Andhra Pradesh and Rajasthan also both crossed the 2 GW mark in 2017.

For the full-year 2017, utility-scale projects accounted for 90 percent of the solar installations totaling 8.6 GW. Telangana and Karnataka each installed more than 2 GW of solar capacity. Andhra Pradesh nabbed the third spot in terms of installed solar capacity by adding 1,225 MW in 2017, followed by Rajasthan, which added 941 MW. Together these four states made up almost 75 percent of total utility-scale solar installations in India in 2017.

According to Mercom’s 2017 Q4 and Annual India Solar Quarterly Market Update, Telangana and Karnataka together accounted for approximately 1.6 GW of installations in the fourth quarter of 2017. Most other Indian states recorded less than 200 MW of installations during the period.

The increase in large-scale installations in these four states was significant compared to the installation numbers recorded one year earlier.

Various officials at nodal agencies and distribution companies reiterated that the transmission infrastructure in all of these states was bolstered in the past year and the states also benefited from joining the government’s UDAY program.

At the same time, these officials also commented that the rooftop solar sector has not yet tapped its true potential. Officials believe there will be a huge surge in rooftop installations in coming years thanks to a subsidy program proposed by MNRE. The program is poised to make DISCOMs less inhibited about rooftop solar.

Here is a detailed look at the top four states’ utility-scale solar growth trajectory over the past one year:

TELANGANA

Telangana had a 2.4 GW solar pipeline in the year 2016 and the state has executed almost its entire pipeline. Of the 2.2 GW commissioned in Telangana during 2017, 1.8 GW fell under the state’s solar policy, while another 300 MW were under the National Solar Mission Phase II Batch II.

Telangana joined the Ujwal DISCOM Assurance Yojana (UDAY) program in January 2017 to get an estimated net benefit of ₹61.16 billion (~$895.8 million).

“The grid has undergone massive upgrades in Telangana as the state warms up for an industrial boom. Even the DISCOMs are now performing better and this has resulted in all parties being satisfied as there are strong commitments pertaining to trade in power from these projects,” commented an official at Telangana New and Renewable Energy Development Corporation.

Commenting on the implications of the addition of huge solar capacity to the grid, the official added, “There are regulations in place and modernization work is going on to accommodate new capacity additions.”

When asked what lies ahead for the solar sector of the state, the official said, “We keep reviewing policies like net-metering and rooftop, and keep an eye on MNRE guidelines for large-scale projects. RPO requirements will drive growth and we will see what new comes up in the future.”

Solar power now constitutes 21.5 percent of the total capacity mix, which is a high number for the state. Unless grid modernization stays ahead, it will become challenging to add more intermittent power to the grid.

Some isolated incidents of payment issues have been reported in the state. Land acquisition and processes in the state are considered poor by developers.

KARNATAKA

In 2016, Karnataka had the largest project pipeline comprising 3.4 GW. The state has commissioned over half of its project pipeline to date.

Approximately 1.5 GW of projects that were allocated under the various phases of the state’s solar policy were commissioned during the past year. Over 600 MW of solar projects under the National Solar Mission in Karnataka were also commissioned during 2017.

Talking to Mercom about the state’s solar growth trajectory, a KREDL official said, “We want to make Karnataka a model renewable energy state. Policy implementation and removal of hurdles by the state electricity regulatory commission, Karnataka Electricity Regulatory Commission (KERC), has led to a spike in installation numbers.”

“Even the solar park infrastructure at Pavagada is being developed at a fast pace and because of this, we added another 600 MW in 2017,” the official added.

On the future of solar in the state, the KREDL official said, “As of now, to develop 1.2 GW Pavagada completely is our main aim. Then, there are other programs through which projects will be developed taluk wise. The immediate and near future RPO requirements will decide the tender trajectory for the state.”

The land acquisition process is an issue in Karnataka. Renewable energy as a percentage of installed power capacity is the highest in the state at close to 40 percent. Unless the grid infrastructure is ramped up rapidly, future renewable capacity additions will be in jeopardy. Karnataka also has had the most generous open access policy, but the state has been a reluctant procurer of solar power and is extremely sensitive to cost. Any increase in solar procurement costs due to a duty imposition could freeze future solar installations in the state.

ANDHRA PRADESH

The state had a solar pipeline of 1.5 GW at the end of the year 2016. Almost 1.2 GW of solar projects were commissioned in Andhra Pradesh in all of 2017.

Of the 1.2 GW of projects commissioned in Andhra Pradesh in 2017, 1 GW of projects were allocated under JNNSM Phase II Batch II in December 2015.

“Augmentation of grid infrastructure, completion of solar park infrastructure in Kurnool and the ongoing solar project work in the state’s Ananthapuram district has further boosted the state’s installation numbers,” a NREDCAP official told Mercom.

The official informed Mercom that the transmission corporation of Andhra Pradesh (APTRANSCO) is developing a new transmission infrastructure, which has also helped in the development of solar projects in the state.

“The development of solar parks is our main priority as most of Andhra Pradesh’s solar capacity is being developed in solar parks,” the official said when asked about the state’s solar development in 2018.

Renewable penetration to the grid is also high in Andhra Pradesh at close to 30 percent but solar is only at 10 percent. Grid issues and costs are expected to be the major hurdles going forward. The solar project pipeline is fairly weak with just over 500 MW.

RAJASTHAN

Rajasthan had a solar project pipeline of 1.2 GW in December 2016. The state successfully added 941 MW of large-scale solar capacity in the calendar year 2017. The state had the second highest solar project pipeline with over 1.5 GW.

A Rajasthan Renewable Energy Corporation Limited (RRECL) official told Mercom, “In Rajasthan, a lot of old projects were completed, but we are still struggling with certain issues due to which off-takers not highly interested in signing new PPAs.”

“The state will benefit once the Green Energy Transmission Corridor project is complete as the demand within the state is weak, but the state can be a provider for other resource poor states. Recently, SECI tendered in Rajasthan for the supply of solar power to Uttar Pradesh. More of this is required to push solar growth in Rajasthan,” added the RRECL official.

Rajasthan has enough capacity top power the state and is looking to export power as it has the best solar insolation levels in the country.

“Even with the impressive performance of a handful of states in the past year, 2018 looks weaker due to uncertainties created by the impending safeguard and anti-dumping cases. More importantly it will come down to power demand in individual states and grid infrastructure, which needs to be built up at a fast pace to keep up with intermittent solar and wind power generation going forward,” said Raj Prabhu, CEO of Mercom Capital Group.

Image credit: Canadian Solar