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

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
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.

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.

1 December 2021
Join over 500 attendees at this virtual conference on 1-2 December 2021 for expert presentations covering PV Module Technology, Supply & Site Optimisation for Utility-Scale. Delegates can access streamed presentations, session recordings and chat/messaging tools to connect with fellow delegates and speakers. Speakers include leading developers, manufacturers, testing and research institutes, including: NREL, Silicon Ranch, Sonnedix, Heliene, Powertis, LONGi Solar, JinkoSolar, PVEL, Risen Energy, Seraphim, STS, Trina Solar, Eternalsun Spire, QEERI, Fraunhofer, Estuary Capital Partners, VDE, First Solar, Longroad Energy, Powertis and DNV Energy Systems

Read Next

December 1, 2021
LONGi Solar has dropped its wafer prices by as much as 9.75%, its first such fall in more than a year, as signs continue to mount that industry prices are set to normalise into next year.
PV Tech Premium
November 30, 2021
Array Technologies reveals to PV Tech Premium the core motivations behind its US$652m deal to acquire STI Norland, creating what it says is the world’s biggest tracker company, from stronger supply chains to an ability to target more international markets
November 30, 2021
JinkoSolar has slashed its shipments guidance for the year, reducing its top end guidance by more than 5GW as it blamed ongoing logistics issues and port blockages.
November 24, 2021
Tata Group is planning to set up a 4GW solar cell manufacturing unit in the Indian state of Tamil Nadu, according to a report from the Times of India.
November 24, 2021
Solar manufacturing leader LONGi Solar has signed a two-year wafer supply deal with Chinese PV manufacturer DAS Solar which could be worth up to US$1.1 billion.
November 19, 2021
Canadian Solar has warned of solar cell overcapacity next year, slamming the breaks on its own cell manufacturing expansion plans while accelerating on its module assembly roadmap.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
December 1, 2021
Solar Media Events
February 1, 2022
London, UK
Solar Media Events
February 23, 2022
London, UK
Solar Media Events
March 23, 2022
Austin, Texas, USA
Solar Media Events
March 29, 2022
Lisbon, Portugal