India added 438 megawatts (MW) of solar capacity in Q3 2020, a 114% increase compared to 205 MW installed in Q2 2020, according to Mercom India Research’s newly released Q3 2020 India Solar Market Update. Solar installations were down by 80% year-over-year (YoY) compared to 2,177 MW added in Q3 2019.
Solar installations in the first nine months of 2020 totaled 1.73 gigawatts (GW), a 68% decline compared to 5.48 GW added in the same period of 2019.
Large-scale installations totaled 283 MW compared to 120 MW in the previous quarter. YoY, large-scale installation levels decreased by 85% compared to 1,932 MW installed in Q3 2019.
“The solar industry in India is glad to see the back of 2020, which will end up as one of the worst years for solar in India as COVID-19 took a heavy toll on the industry. However, the market is almost back on its feet, and the mood is upbeat as the industry heads to 2021 – one of the best years forecasted for the sector,” said Raj Prabhu, CEO of Mercom Capital Group.
The lockdown situation has eased in most parts of the country, and economic activity has resumed steadily. The country’s solar industry is showing signs of recovery with increased activity compared to the previous quarter. However, the industry still has a long way to go. Several project deadlines have moved to Q4 2020, and the commissioning dates for a large number of projects have been postponed to the first half of 2021.
According to the report, India still has a robust large-scale solar project development pipeline of 44.7 GW, with another 34.6 GW of projects tendered and pending auction at the end of Q3 2020.
Rooftop solar installations accounted for 155 MW in Q3 2020, an increase of 82% compared to 85 MW installed in Q2 2020. YoY, rooftop installations declined 37% compared to the 245 MW added in Q3 2019.
The worst seems to be over for the rooftop market, and installers are reporting intense competition with multiple companies vying for the same business and pushing prices down.
The commercial and industrial (C&I) segment dominated the Indian solar rooftop market in Q3 2020 and accounted for a 95% market share. The coronavirus pandemic has made C&I customers realize that going solar is one of the best ways to cut down operational costs and keep their businesses afloat during these challenging times.
Mercom India Research is forecasting approximately 3.3 GW of solar installations in 2020 as most of the projects scheduled for commissioning in the second half of 2020 were moved to the first half of 2021.
“The power demand is back up, and the interest rates have come down. As the industry looks forward to a banner year, there are some short-term risks it has to deal with, like the uncertainty around basic customs duty (BCD), DISCOM dues, and the difficulty in getting power sale agreements signed, ” added Prabhu.
Key Highlights from Mercom India Research’s Q3 2020 India Solar Market Update
- Solar installations in India in Q3 2020 totaled 438 MW, a 114% increase compared to 205 MW installed in Q2 2020; large-scale solar installations added up to 283 MW, while rooftop installations accounted for 155 MW
- Solar installations in 9M of 2020 totaled 1.73 GW
- Cumulative solar installed capacity in India was approximately 37.4 GW at the end of Q3 2020
- The large-scale solar project pipeline in India stood at 44.7 GW, with another 34.6 GW of tendered capacity pending auctions at the end of Q3 2020
- In Q3 2020, investments in the Indian solar sector totaled $267.8 million (~₹20 billion), 170% higher compared to Q2 2020
- Solar accounted for 41% of new power capacity additions in 9M 2020
- Electricity generated from solar in Q3 2020 crossed 13 billion units