India added nearly 513 MW of open access solar installations in the first quarter (Q1) of the calendar year (CY) 2022, marking an increase of 58% quarter-over-quarter (QoQ) compared to 324 MW in Q4 2021, according to Mercom India Solar Open Access Market Report Q1 2022.

The year-over-year (YoY) growth was 22% compared to 422 MW installed in Q1 2021.

Karnataka was the top state in terms of installations in Q1 2022, followed closely by Maharashtra, Gujarat, Chhattisgarh, and Tamil Nadu. The top five states accounted for 86% of the total installations during the quarter.

With favorable open access policies and regulations and timely approvals provided by distribution companies (DISCOMs), projects have been consistently coming up in Karnataka, Maharashtra, Gujarat, Chhattisgarh, and Tamil Nadu.

Karnataka

Karnataka accounted for 30% of the total installations in Q1 2022. The installations marked an impressive 112% jump QoQ.

The state is also at the top in terms of cumulative installations, accounting for 37% of installations in the country.

The captive and group captive models are attractive due to cross-subsidy surcharge and additional surcharge exemptions. The third-party open access model can also become viable only if the cross subsidy and additional surcharge are reduced considerably. Karnataka has the necessary regulatory framework in place to foster the growth of open access.

Maharashtra

Maharashtra stood second in terms of installations in Q1 2022, registering a growth of 131% compared to the installations in Q4 2021.

The high retail tariff was one of the main reasons for commercial & industrial (C&I) consumers opting for open access solar in the state.

The captive business models are predominant in the state due to exemptions in the cross-subsidy surcharge and additional surcharge. The multi-year tariff arrangement released by the state regulator has helped in protecting the interest of developers, investors, and consumers.

Gujarat

Gujarat stood third on the list in Q1 2022.

The growth in open access installations can be attributed to the growing popularity of captive projects. Interestingly, even though the retail tariff for the C&I segment is low, consumers still opt for open access.

All four DISCOMs in the state have A+ ratings, thanks to cost-reflective tariffs, healthy collections, and adequate government subsidy support.

The reduction of the additional surcharge from ₹0.69 (~$0.009)/kWh in FY22 to ₹0.25 (~$0.003)/kWh for FY23 has also boosted open access business in the state.

Chhattisgarh

Chhattisgarh was fourth on the list in terms of installations during the quarter.

Currently, Chhattisgarh is an untapped market for renewables, and the state is making good strides in the open access market. Exemptions on cross subsidy surcharge and additional surcharge for all open access business models have made Chhattisgarh an attractive market for solar open access business.

Tamil Nadu

Tamil Nadu was fifth on the list in terms of open access installations.

The rise in open access installations may be attributed to pending projects commissioned in Q1 2022. Timely approval by the DISCOMs also drove the growth.

The waiver of cross subsidy and additional surcharges for captive and group captive installations has reduced the net landed cost of electricity, paving the way for the growing number of open access consumers in Tamil Nadu.

‘Mercom India Solar Open Access Market Report Q1 2022’ is 116 pages and covers detailed analysis and data on the market. For the complete report, please visit:  https://mercomindia.com/product/india-solar-open-access-market-report-q1-2022