Installations in the Indian solar market rose by 36 per cent year-on-year during third quarter of calendar year 2019, reaching 2,170 Mw from 1,592 Mw a year ago. Compared to the second quarter of 2019, installations are up by 44 per cent. However, solar installations in the first nine months of 2019 reached 5.4 gigawatts (Gw), down 19 per cent from 6.7 Gw of capacity added in the first nine months of 2018, according to Mercom India Research.
In Q3 of 2019, large-scale installations totaled 1,925 Mw compared to 1,218 Mw in Q2 2019 and 1,157 Mw in Q3 of 2018. The large-scale solar project development pipeline for the country has increased to 22.6 Gw. About 37 Gw of solar has been tendered and was pending auction at the end of the quarter.
Rooftop solar installations declined by 16 per cent quarter-over-quarter (QoQ) in Q3 of 2019, totaling 245 Mw compared to 292 Mw installed in Q2 2019. Rooftop solar installations fell by 44 per cent YoY compared to 435 Mw in Q3 of 2018.
“Solar installations in Q3 of 2019 beat the downward trend seen over the past five quarters; however, we are revising our forecast down for 2019 as over 1 Gw of projects have been delayed. The rooftop market continues to be weak amid a lack of financing and consistent regulatory issues,” said Raj Prabhu, CEO and co-founder of Mercom Capital Group.
The revision in the solar forecast was attributed to the slowdown in rooftop solar installations was due to partial commissioning of large-scale solar projects, and over a gigawatt of projects that were scheduled to be commissioned in the third and fourth quarters getting pushed to 2020 due to a number of reasons, including: legal issues, land acquisition problems, execution delays, tariff approvals, AP state Issues – policy instability, and access to financing.
Total power capacity addition during nine months of 2019 was 13 Gw from all power generation sources. Of this, renewable energy sources accounted for nearly 56 per cent of installations, with solar representing 41.4 per cent of new capacity and wind with 13.6 per cent. Coal accounted for almost 44.1 per cent of new capacity in 9M of 2019.
India’s cumulative solar installations stood at 33.8 Gw by the end of third quarter of 2019. However, rooftop installations still made up only 12 per cent of total solar installations. Because of the liquidity crunch and worsening economic conditions, commercial & industrial (C&I) companies are struggling to finance rooftop projects. The country has crossed 4 Gw of cumulative rooftop solar installations and achieved only 10 per cent of the 2022 target of 40 Gw.
Mercom India Research has revised its solar forecast down to about 7.3 Gw for capacity additions in CY 2019 from the previous estimate of 8 Gw. Mercom is estimating about 10 Gw of solar installations in CY 2020, assuming stable market conditions.
Tamil Nadu was the top state for large-scale solar installations in Q3 2019, followed by Rajasthan and Karnataka. Large-scale solar installations were mostly concentrated in five states, which made up 96 per cent of installed capacity in the quarter.
“The pipeline of projects due to be commissioned in 2020 looks a lot stronger and we should see the solar market resume year-over-year growth again. But a lot will depend on the economy getting back on track, which will affect lending and power demand,” added Prabhu.