Solar accounted for 41 per cent of new power capacity
Slowdown
Tariff
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.
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