Economy

Solar installations in first half of 2019 at 3.2 GW, down 35 per cent

V Rishi Kumar Hyderabad | Updated on September 05, 2019 Published on September 05, 2019

Representative image

Solar accounted for 41 per cent of new power capacity

Solar installations in India, during the first half (H1) of 2019 reached 3.2 gigawatts (GW). This is a 35 per cent decline in capacity, compared to 5.1 GW added in H1 of 2018, according to Mercom India.

In its report on Q2 2019, titled India Solar Market Update, Mercom found that the total installations in the Indian solar market declined by 14 per cent in the second quarter, reaching 1,510 MW as against 1,761 MW in Q1 2019. Installations were also lower year-over-year (YoY) compared to 1,665 MW in Q2 2018.

In Q2 2019, large-scale installations totalled 1,218 MW compared to 1,498 MW in Q1 2019 and 1,250 MW installed in Q2 2018. The large-scale solar project development pipeline has increased to 22 GW. About 34 GW of solar has been tendered and was pending to be auctioned at the end of the quarter.

Rooftop installations grew by 11 per cent quarter-over-quarter (QoQ) in Q2 2019, totalling 292 MW compared to 263 MW installed in Q1 2019.

“It has been a rough couple of quarters for the Indian solar market, exacerbated by tough lending conditions. Post elections, we expect the second half of the year to be slightly better, but the liquidity issues need to be resolved for market momentum to return,” Raj Prabhu, CEO, and co-founder of Mercom Capital Group, said.

Slowdown

The report attributed the drop in solar installations in Q2 2019 to a slowdown in rooftop solar installations and partial commissioning of solar projects.

Total power capacity additions in the first half of 2019 was 8 GW in India from all power generation sources. Of this, renewable energy sources accounted for nearly 58 per cent of installations, with solar representing 41 per cent of new capacity. Wind energy accounted for 15 per cent of the new capacity while coal represented for almost 42 per cent of new capacity added.

The cumulative installed capacity stood at 31.5 GW by the end of Q2 2019. However, rooftop installations only make up 12 per cent of total solar installations. India has achieved only 10 per cent of its target capacity addition (i.e 40 GW by 2022).

Mercom forecasts India to install over 8 GW of solar capacity during 2019. The report estimates solar installations in India to reach approximately 70 GW by the end of 2022 based on the current market dynamics.

Tariff

Tariff caps imposed by government agencies have slowed down the solar auction activity in the country. Developers are reluctant to bid at the levels

prescribed by state agencies, instead of a market-based auction in which the lowest bid wins.

Land acquisition, transmission, and acquiring approvals remain a challenge to commission large-scale projects on time. Developers have also raised concerns about charges for forecasting and scheduling power during drastic changes in weather conditions.

Published on September 05, 2019
This article is closed for comments.
Please Email the Editor