Indian Solar Market Adds 1,589 MW In Q3 2018 Reports Mercom
The Indian solar market installed 1,589 MW in the third quarter of 2018. Installations declined by 4 percent compared to 1,659 MW in Q2 2018, said Mercom India Research in its newly released Q3 2018 India Solar Market Update.
Installations were notably lower year-over-year (YoY) compared to 2,278 MW installed in Q3 2017. Large-scale installations in Q3 2018 totaled 1,154 MW compared to 1,244 MW in Q2 2018 and 2,013 MW in Q3 2017.
“Lower installation levels were not a surprise due to a slowdown in tender and auction activity last year. The safeguard duty, lack of clarity around GST rates and land and transmission issues have all sapped the momentum from the solar market,” said Raj Prabhu, CEO and Co-Founder of Mercom Capital Group.
“The Indian solar industry is trying to recover from the safeguard duty announcement. An acceptable tariff for both project developers and government agencies has been an ongoing challenge since the inception of India’s solar program,” continued Prabhu.
The report also found that rooftop installations grew 5 percent quarter-over-quarter in the third quarter totaling 435 MW compared to 415 MW installed in Q2 2018. Rooftop installations increased by 64 percent YoY compared to 265 MW installed in Q3 2017.
India’s cumulative installed solar capacity reached 26 GW at the end of Q3 2018.
The report forecasts solar installations of approximately 8 GW for the calendar year (CY) 2018.
Rajasthan emerged as the top state for large-scale installations with a newly added solar capacity of over 600 MW, followed by Odisha and Telangana in Q3 2018. Together these three states made up approximately 70 percent of large-scale installations in the quarter.
Analysis from the report reveals that approximately 4 GW of solar auctions have been cancelled by multiple agencies this year. The Solar Energy Corporation of India (SECI) also introduced a tariff ceiling which has capped tariff levels that developers could bid for, making auctions somewhat controlled where bids can only move in one direction regardless of market conditions.
The report added, “After a year and a half, the solar industry is still not clear as to what the actual Goods and Services Tax (GST) rates are. Land and transmission availability challenges have contributed to slower growth in large-scale projects. Rupee depreciation and higher interest rates have added to the headwinds faced by the industry.”
“In the long-term, prospects for solar remain bright in the country. The energy transformation in the country continues and 2018 maybe the first year where solar makes up over 50 percent of new capacity additions in India. Companies need to be able to play the long game if they want to be successful in the Indian solar market,” said Prabhu.
Key Highlights from Mercom India Research’s Q3 2018 India Solar Market Update.
1. Solar installations in India in Q3 2018 totalled 1,589 MW, a 4 percent decline compared to 1,659 MW installed in Q2 2018.
2. Of the 1,589 MW installed in Q3 2018, large-scale installations added up to 1,154 MW (73 percent), while rooftop installations accounted for 435 MW (27 percent).
3. Cumulative solar installed capacity in India was approximately 26 GW, with the cumulative rooftop solar installed capacity reaching 2.8 GW at the end of Q3 2018.
4. Solar represented 53 percent of the newly added power capacity with 6.6 GW installed in the first nine months of 2018.
5. Mercom forecasts India to install approximately 8 GW in CY 2018.
6. Renewables comprise approximately 21 percent of India's total installed capacity, with solar accounting for about 7.5 percent. Among renewables, solar accounts for approximately 35 percent of the installed capacity.