Cumulative solar installations in India as of June 2020 were ~37 GW
India added 205 megawatts (MW) of solar capacity in calendar year (CY) Q2 2020, an 81% decline compared to 1,090 MW installed in Q1 2020, according to Mercom India Research's newly released Q2 2020 India Solar Market Update. Solar installations were down 86% year-over-year (YoY) compared to the 1,510 MW added in Q2 2019.
Solar installations in the first half (1H) of 2020 totaled 1.3 gigawatts (GW), a 59% decrease compared to 3.2 GW of capacity added in 1H of 2019.
Large-scale installations totaled 120 MW compared to 896 MW in the previous quarter. Year-over-year, large-scale installations decreased by 90%. Large-scale project installation figures in Q2 were the lowest in the past seven years.
"Solar project construction activity came to a standstill in Q2 as the coronavirus pandemic disrupted every aspect of the economy. Labor availability was one of the biggest challenges for large-scale projects. With monsoons setting in, we may have to wait until Q4 for the activity to pick back up," said Raj Prabhu, CEO of Mercom Capital Group. "Considering the realities on the ground, the industry needs more than the 30-day extension post-lockdown period currently granted by the government for project commissioning."
With the lockdown lifted in phases in states, supply chain disruption, and workforce shortages due to the coronavirus (COVID-19) outbreak, most solar projects scheduled for commissioning have been delayed and slipped into later quarters with a possibility of moving to next year.
According to the report, India still has a significant large-scale solar project development pipeline of 41.7 GW, with another 34.2 GW of projects tendered and pending auction at the end of Q2 2020.
Rooftop solar installations accounted for 85 MW in Q2 2020, a decline of 56% compared to 194 MW installed in Q1 2020. In a YoY comparison, rooftop installations declined by 71%, with 292 MW added in Q2 2019.
The rooftop solar market, which was already struggling, has a steep decline in Q2 as the C&I market fell amid COVID. Installations in Q2 were the lowest since the second quarter of 2016, noted the report.
"Mercom India Research is forecasting approximately 4 GW of solar to be added in 2020, which was the worst-case scenario laid out in our previous report. This assumes that the COVID situation will get worse to the point where most of the projects will be moved to 2021," added Prabhu.
Since the COVID-19 outbreak and the subsequent shutdown in many parts of the world, the government is pushing to localize the supply chain. With the new government policy shift towards "Atmanirbhar" or "self-reliant" India, domestic manufacturing has become the primary objective. To facilitate this, the safeguard duty has been extended, and in addition, a basic customs duty is expected to be imposed soon.
Delays in setting up transmission infrastructure and continuing difficulties in obtaining net metering approvals could further add to the sector's challenges.
Total power capacity additions in the first half of 2020 stood at 2.3 GW from all power generation sources. Of this, renewable energy sources accounted for nearly 85% of installations, with solar representing 56% of new capacity, and wind representing 14%. Coal accounted for 13% of new capacity additions.
Almost 70% of the new power capacity additions came from solar and wind in the first half of the year.
Rajasthan and Karnataka were the top states, contributing 68% of solar installations in Q2.
The report also covers the decline in solar component and project costs trends in detail.
Key Highlights from Mercom India Research's Q2 2020 India Solar Market Update
- Solar installations in India in Q2 2020 totaled 205 MW, a decline of 81% compared to 1,090 MW installed in Q1 2020
- In Q2 2020, large-scale solar installations came to 120 MW, while rooftop installations accounted for 85 MW
- Cumulative solar installed capacity in India was approximately 37 GW at the end of Q2 2020
- The large-scale solar project pipeline in India stands at 42 GW, with another 34 GW of tendered capacity pending auction at the end of Q2 2020
- Mercom India forecasts solar installations of approximately 4 GW in CY 2020
- Solar accounted for 56% of new power capacity additions in 1H 2020
- Almost 70% of the new power capacity additions came from solar and wind in the first half of the year.
- Electricity generated from solar in Q2 2020 crossed 15.7 billion units
Mercom India's Q2 2020 report has 107 pages and covers all facets of India's solar market. For the complete report, visit: https://mercomindia.com/product/q2-2020-india-solar-market-update
Mercom's India solar Quarterly Update is the most in-depth and accurate report available on the state of the Indian Solar Market. The report covers the entire solar market, pricing, policies, and forecast that will help companies navigate the challenges as well as take advantage of opportunities in the market.
Mercom Communications India, a subsidiary of U.S.-based Mercom Capital Group, is a clean energy research and communications firm in India recognized worldwide for its expertise in Indian cleantech markets. Located in Bangalore, India, Mercom has been providing communications and research services across India for clean energy organizations since early 2009.