Report: India’s solar installations more than tripled in 2021
India added 2,835 MW of solar in the third quarter of 2021, up 14% compared to 2,488 MW installed in the second quarter. Year-over-year installations rose 547%, according to a new report by Mercom India Research.
In the first nine months of 2021, India added more than 7.4 GW of solar, a 335% increase compared to the 1.73 GW installed in the same period in 2020.
Increased raw materials costs, “severe volatility” in module availability and price, curtailment of power in several Indian states, and high freight charges all added to difficulties for project developers, the report said.
“Despite supply challenges, the Indian solar market is headed towards one of best years on record,” said Raj Prabhu, CEO of Mercom Capital Group. He said he expects a strong 2022 despite continued high prices for components and uncertainties surrounding a transmission issue in Rajasthan.
The report said there was a steep rise in the average selling prices of solar modules during the third quarter. Prices of mono PERC modules rose more than 15% from the second to the third quarter, with supply constraints occurring after major manufacturers started cutting output in China. Freight charges peaked at around $9,000 per container in the quarter.
The report said that manufacturing capacity ramp-up continued at a “brisk pace” as domestic producers look to take advantage of the 40% basic customs duty scheduled to be imposed beginning in April 2022. In the second quarter of next year, Prabhu said he expects to see procurement strategies starting to “change drastically as imports become expensive.”
According to the report, module prices have increased for six consecutive quarters, a trend not seen in the past 10 years.
The third quarter also recorded the largest quarter-over-quarter increase in large-scale system costs, which grew by more than 10% due to increased raw material and component prices.
Rajasthan is now the top solar state in India in terms of cumulative installed capacity, overtaking Karnataka, which had held the position since 2018 according to data from the report. As of September, the top 10 states accounted for about 96% of the country’s cumulative large-scale solar installations.
Rajasthan has been the top solar installer for three consecutive quarters by contributing about 63% of the total large-scale solar installations in the country this quarter, followed by Gujarat with 19%.
According to the report, India added close to 11.6 GW of power capacity during the first nine months of the year. Solar dominated capacity additions, accounting for close to 60%, followed by thermal power, which contributed 21%. Renewables (including large hydro) made up 79% of total power capacity additions.
Source: Renewable Energy