India solar deployment forecasts revised downwards as COVID lockdowns, supply chain issues leave prospects ‘murky’

Facebook
Twitter
LinkedIn
Reddit
Email
ReNew Power has almost 10GW of installed solar and wind capacity in India. Image: ReNew Power.

India installed just over 2GW of solar in Q1 2021 as the country rebounded from COVID-19 related delays, however full-year installs could fall to well below previous estimates, one forecast suggests.

Research and consultancy firm Bridge to India, in an update to its Solar Compass report published today, says that 2,105MW of solar was installed in Q1 2021, taking the country’s total cumulative capacity to 44.2GW.

This article requires Premium SubscriptionBasic (FREE) Subscription

Unlock unlimited access for 12 whole months of distinctive global analysis

Photovoltaics International is now included.

  • Regular insight and analysis of the industry’s biggest developments
  • In-depth interviews with the industry’s leading figures
  • Unlimited digital access to the PV Tech Power journal catalogue
  • Unlimited digital access to the Photovoltaics International journal catalogue
  • Access to more than 1,000 technical papers
  • Discounts on Solar Media’s portfolio of events, in-person and virtual

Or continue reading this article for free

Mercom India’s solar market update has a broadly similar figure, stating that 2.05GW of solar was installed in the quarter, up on the 1.5GW installed in Q4 2020 and an 88% increase on the 1.1GW installed in Q1 2020.

Those figures make Q1 2021 the most prolific quarter for solar deployment in India since Q3 2019, driven by a rush of projects delayed from the previous year.

But the prospects for future quarters looks “murky”, according to Bridge to India, as the situation for development grows complicated due to further pandemic-associated lockdown measures enforced in India and increasing project execution costs.

Solar module costs have increased in recent weeks on the back of soaring polysilicon prices, while other components have also experienced similar supply chain constraints and revised prices accordingly. Bridge to India has said that while module and other equipment prices have remained relatively stable to date, the risk of delays has increased and some suppliers are believed to be renegotiating contracts due to supply chain constraints.

Furthermore, India has recently passed a basic customs duty of 25% on cells and 40% on modules, increasing the price of imported solar components further.

While auction and tender activity has remained strong – more than 19GW of solar was contracted for via tenders and auctions in India in Q1 – Bridge to Inside said an ongoing reluctance from the country’s distribution companies, or DISCOMs, to sign power purchase agreements remains a “major concern”. Bridge to India managing director Vinay Rustagi spoke to sister publication PV Tech Power about the issues surrounding DISCOMs and other policy hurdles earlier this year.

Mercom India now forecasts that just 7GW of solar will be installed in India this year, a 3GW revision of the 10GW it forecasted earlier this year and considerably weaker than the 12GW and 13.5GW initially forecasted by BloombergNEF and Bridge to India respectively.

“With the second wave of the pandemic hitting the country, the industry is battling solar component price increases and volatility. Even more concerning is the uncertainty in procurement as shortages are widespread. Policy restrictions and duties have added to the rising costs and unpredictability,” Raj Prabhu, CEO of Mercom Capital Group, said.

Read Next

Subscribe to Newsletter

Upcoming Events

Solar Media Events
February 28, 2024
Seattle, USA
Solar Media Events, Industry Events
March 12, 2024
Frankfurt, Germany
Upcoming Webinars
March 13, 2024
9am EDT / 1pm GMT / 2pm CET
Solar Media Events
March 19, 2024
Texas, USA