Indian rooftop solar up 517% on last year despite rising costs

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India’s cumulative rooftop solar capacity now stands at 6.1GW, according to Mercom. Image: Nuno Marques

India added 521MW of rooftop solar in Q2 2021, an increase of 517% compared to the 85MW added in the same quarter last year despite a slight increase in costs, according to a Mercom India report. The analyst and consultancy firm is predicting the best year for India’s rooftop solar market since 2018.

India now has a cumulative installed rooftop capacity of 6.1GW, with Q2 being the most successful quarter ever for rooftop solar, accounting for 20% of total solar additions in the country over the quarter.

Moreover, 1H 2021 saw India add 862MW of rooftop solar – a 210% increase on 1H 2020 – which means installations in 1H have already surpassed the total rooftop solar capacity installed in all of 2020 (719MW) when the market was severely affected by COVID-19 lockdowns.

Cumulative and annual rooftop solar installs in India since 2011. Source: Mercom

These additions, however, were not spread evenly across the country, with 10 Indian states accounting for 83% of the cumulative installations. Gujarat deployed by far the most rooftop solar, with the roughly 1.3GW installed accounting for 55% of total added capacity, followed by Maharashtra (~700MW) and Rajasthan (~450MW).

The report also highlighted the rising cost of rooftop solar in India, with average costs increasing by 3% to ₹39.1 million/MW (US$530,000) compared to ₹38 million/MW (US$520,000) in Q1 2021. These price rises are largely down to the increased cost of modules and raw material shortages, said the report.

And, the first half of the year could have been even stronger had it not been for uncertainty surrounding India’s net metering system, said the report.

“Finalising the net metering cap at 500kW has removed uncertainty for installers and paved the way for future,” said Raj Prabhu, CEO of Mercom Capital Group. “However, haphazard rooftop solar policies across states and a lack of support from distribution companies are holding back the sector.”

Stepping back from rooftop solar, India is on track to install an additional 4,580MW of solar capacity in the second half of 2021. But, in an interview with PV Tech earlier this year, research company Bridge to India’s managing director Vinay Rustagi said he expected India to have around 65GW of installed solar capacity by the end of 2022, which will fall short of its target of deploying 100GW of solar by then.

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