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Solar open access installation rises nearly 7-fold in April-June: Report

Cumulative solar installations in the open-access market have now surpassed 4.5 GW as of June 2021: Report

solar energy | solar power  | solar projects

Press Trust of India  |  New Delhi 

There are 10 projects planned for strengthening the existing system or ramping up capacity of the power transmission system in states
Representative image of a solar panel (File photo)

Solar open access installations in India increased nearly seven-fold to 209 MW in the second quarter of 2021 from 27 MW a year ago.

Solar open access installations in India totalled 209 MW in the second quarter of 2021, compared to 27 MW installed in Q2 2020, according to Mercom India Research's newly released report - Mercom India Solar Open Access Market Report Q2 2021.

Cumulative solar installations in the open-access market have now surpassed 4.5 GW as of June 2021, it said.

The pipeline of solar open access projects under development and pre-construction is estimated to be about over 1 GW, the report added.

The latest report has expanded coverage to include two new markets: Chhattisgarh and Odisha. It covers the current policies related to the open-access market, amendments, price trends, and emerging business models.

The top states for solar open access installations have been analysed based on the solar open-access project (captive/ group-captive/ third-party) installations, Discoms ratings, retail power tariff (industrial and commercial customers) structure, open access charges, and costs, it noted.

Due to the second wave of COVID, the quarter-over-quarter installations declined by about 50 per cent in Q2 2021 (April-June) compared to the preceding quarter.

However, it said that with the pending projects in the pipeline and the government's initiative to promote green open, solar open access projects, installations are expected to rise.

Installations in the first half of 2021 (January to June) totalled about 628 MW of solar open access, a 12-fold (1,230 per cent) growth compared to 47 MW installed in H1 2020.

In the first half of 2021, Uttar Pradesh had the highest number of installations in the solar open access segment, followed by Maharashtra and Tamil Nadu.

As of June 30, 2021, Karnataka is the largest market for solar open access cumulatively, followed by Rajasthan, Madhya Pradesh, Andhra Pradesh, and Tamil Nadu. The top five states account for approximately 73 per cent of India's total solar open access market.

In Q2 2021, the largest solar open access projects capacity was developed in Uttar Pradesh, followed by Chhattisgarh and Maharashtra. The top three states accounted for 83 per cent of installations in the quarter.

According to the report, more conducive policies for setting up open access projects can be found in Uttar Pradesh, Rajasthan, and Chhattisgarh. The commercial segment has potential for captive open access projects in Maharashtra.

The average open access tariff in the states covered in this report ranged from Rs 3.50-5.00/kWh with a yearly escalation of 1-2 per cent depending on contract terms.

Regulatory inconsistencies and policy U-turns have been the major roadblocks in the expansion of solar open access projects. States also have been levying new charges or increasing the existing ones to ensure they do not lose out on their high tariff paying consumers.

DISCOMs need to realise that the demand for renewables cannot be curtailed and have to reconsider the consumers' right to combatting climate change and choosing their suppliers of power, commented Priya Sanjay, Managing Director of Mercom India.

The power demand from C&I entities is growing, and eventually, the states will have to invest in new power generation. On the other hand, open access will not only generate revenue without DISCOMs investing but also bring in large investments from around the world.

Uttar Pradesh was the top seller in the day-ahead market (DAM) market in Q1 2021, while Gujarat was the top purchaser in the DAM market in Q1 2021.

Most corporates are trying to meet most of their power demand through renewable energy sources, and a large group of C&I entities have global commitments like RE100, Science-Based Targets initiative (SBTi), and environmental, social, governance (ESG), the report said.

Many corporates that lack sufficient space to meet a more significant percentage of power demand opt for open access, and the demand for procuring renewables in the open market has only been growing every quarter, it added. PTI KKS.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Tue, September 28 2021. 16:30 IST