Mercom Capital Group, a global clean energy communications and research firm,released its quarterly update on the Indian solar market.
Solar installations in India are expected to reach over 4GW in 2016, compared to 2.3GW installed in 2015. Mercom reiterates its 2017 solar installation forecast of over 9GW. Cumulative installations including large-scale and rooftop projects in the country have reached 9.6 GW.
Of the 4GW to be installed in 2016, 3.7GW are expected to be utility-scale projects and about 275MW are expected to be rooftop projects. The country’s solar development pipeline is now more than 14.2GW with about 6.3GW of projects tendered and pending auction.
Indian government agencies have announced solar tenders of ~3,781MW during Sep-Dec 2016 and auctioned about 1,311MW. Auction activity has slowed over the last three months.
The project development landscape has changed significantly over the last quarter largely due to Chinese module price declines. The average selling prices (ASPs) of Chinese modules in India have declined approximately 10 percent since August and by about 30 percent over the last 12 months. This decline in prices has provided a much-needed boost to developers that won projects at low bids and were struggling to make project economics work.
The major concerns for the industry are currently around transmission, evacuation, curtailment, timely payments and the outcome of the goods and services tax (GST).
The Government of India announced demonetization on November 8, 2016 to end the use of Rs.500 and Rs.1,000 notes as legal tender. While the effects of demonetization have caused chaos across the country, Mercom’s research indicates a possible overall positive outcome for the power sector.
India’s share of solar generation continues to grow with 16.7 percent of new power generating capacity added in 2016 (as of November 2016). Solar accounted for almost one percent of electricity generated from April-October (FY2016-2017), 50 percent more than all of FY2015-2016. The top 10 states account for approximately 90 percent of all solar installations and pipeline; they are: Tamil Nadu, Rajasthan, Gujarat, Andhra Pradesh, Telangana, Madhya Pradesh, Punjab, Karnataka, Maharashtra, and Uttar Pradesh.