India added 2,835 megawatts (MW) of solar capacity in the third quarter (Q3) of the calendar year (CY) 2021, a 14 percent increase compared to 2,488 MW installed in Q2 2021.
The rise marks a massive 547 percent year-over-year (YoY) surge, according to Mercom India Research’s recently released report- Q3 2021 India Solar Market Update.
According to the report, in the 9 months of 2021, India has added over 7.4 gigawatts (GW) of solar capacity, an increase of 335 percent compared to 1.73 GW in 9 months of 2020. The cumulative installed capacity at the end of Q3 2021 stood at 46.6 GW.
Solar module prices have been spiraling for quite some time and have increased for the sixth consecutive quarter, something not seen in the past ten years.
“Despite supply challenges, the Indian solar market is headed towards one of the best years on record, and a complete turnaround from 2021, which was one of the worst years for solar due to COVID-19,” said Raj Prabhu, CEO of Mercom Capital Group.
“We expect a strong 2022 despite the high component prices and uncertainties surrounding the Great Indian Bustard related transmission issue in Rajasthan. An increase in GST, curtailment and payment issues are adding to the challenges facing developers and constraining growth.”
“Manufacturing capacity ramp-up continues at a brisk pace as domestic producers look to take advantage of the 40 percent basic customs duty scheduled to be imposed from April 2022. In the second quarter of next year, we can expect to see procurement strategies starting to change drastically as imports become expensive,” added Prabhu.
Rajasthan remained the top state for the third consecutive quarter by contributing 63 percent of the total large-scale solar installations in the country. As of September 2021, the top 10 states accounted for about 96 percent of the country’s cumulative large-scale solar installations, said the report.
According to the report, India added close to 11.6 GW of power capacity in 9M 2021. Solar dominated capacity additions, accounting for close to 60 percent followed by thermal power, which contributed 21 percent. Renewables (including large hydro) made up 79 percent of total power capacity additions in 9 months of 2021.