According to Mercom India Research Q1 2021 India Solar Market Update, solar capacity additions in India in Q1 2021 were the highest in a quarter since Q3 2019. In Q1 2021, large-scale solar projects totalled 1,749 MW, up 43% Q-o-Q with 307 MW added in rooftop solar installations, an increase of 8% Q-o-Q.
“With the second wave of the pandemic hitting the country, the industry is battling solar component price hikes and volatility. Even more concerning is the uncertainty in procurement as shortages are widespread. Policy restrictions and duties have added to the rising costs and unpredictability,” said Raj Prabhu, CEO of Mercom Capital Group.
The report forecasts solar installations of approximately 7 gigawatts (GW) in 2021 in a medium-case scenario as project timelines get extended due to the second wave of Covid.
The average selling prices (ASPs) of solar modules have risen sharply along with other components, including iron, copper, aluminum, and steel. Freight charges are high all over the world, and the dearth of shipping containers is widespread. The shortage and availability of solar glass and backsheets continue to be issues, according to the report’s findings.
At the end of Q1 2021, cumulative solar installations reached 40.9 GW. Of this, 35.5 GW were from large-scale projects and 5.4 GW were from rooftop solar installations.
The country’s large-scale solar project development pipeline stands at 53.6 GW, along with 24.1 GW of projects tendered and pending auction at the end of Q1 2021.
In Q1 2021, Rajasthan and Uttar Pradesh were the top states for solar, followed by Gujarat and Andhra Pradesh. The top five states accounted for 81% of installations in the quarter.
There is a surge in demand for rooftop solar, especially from industries that see solar power as the best choice for reducing their operating expenses.
Solar installations accounted for 33% of all power capacity added in Q1 2021. Renewables as a whole, including wind and hydro, made up close to 50% of capacity additions in the quarter.
Solar power now represents 10.7% of the total installed power capacity in India as of Q1 2021.
Read More: India adds 2.05 GW of solar capacity in CY Q1 2021