“With the second wave of the pandemic hitting the country, the industry is battling solar modules and other component price rise and volatility. Even more concerning is the uncertainty in procurement as the market is fluid. Policy restrictions and duties have added to the price rise and unpredictability,” Raj Prabhu, Chief Executive Officer at Mercom Capital Group.
In the first quarter (Q1) of 2021, India added 2056 MW capacity which is 37% more in comparison to Q4 of 2020. In Q4 of 2020, India added 1,505 MW of solar power.
If we compare Q1 of 2021 with Q1 of 2020, it is 88% more as India added 1090 MW in Q1 of 2020. This analysis was published by Marcom India in their quarterly Indian solar market report.
As per the report, the major reason for this growth in the Indian solar market is all incompleted solar projects of the last year are getting started & will be completed this year.
Source: Mercom India
In Q1 of 2021, the large-scale solar installations totaled 1,749 MW, which is 43% more than Q4 of 2020 & the rooftop solar installations were 307 MW which is 8% more than the last quarter of 2020.
“With the second wave of the pandemic hitting the country, the industry is battling solar modules and other component price rise and volatility. Even more concerning is the uncertainty in procurement as the market is fluid. Policy restrictions and duties have added to the price rise and unpredictability,” said Raj Prabhu, Chief Executive Officer at Mercom Capital Group.
In their report, Marcom has explained the effects of COVID19 second wave on the Indian Solar industry including the lack of labor, effects on the supply chain, lack and rising price of raw material, and extended timeline of ongoing solar projects.
The average price of solar modules has increased along with the price of other materials like iron, copper, aluminum, and steel. Not only the material but the freight charges around the world have increased and all thises are affecting solar installation.
“Due to the targeted lockdowns, this time around, disruptions and labor issues are not as widespread as last year. However, most of the lockdowns are in important solar states like Rajasthan, Maharashtra, and Uttar Pradesh, which will significantly impact installation totals this year,” added Prabhu.
At the end of Q1 of 2021, 53 GW of solar large scale and 24 GW of rooftop solar projects are in the pipeline which indicates that the Q2 can add more capacity to Indian Solar Power Generation.
Source: Mercom India
The top solar contributors of Q1 were Rajasthan, Uttar Pradesh, Gujarat, and Andhra Pradesh. These 4 states combined added 81% of the total installation of Q1.
In this pandemic, a large part of the commercial and industrial sector has realized that going solar will help them to cut down a significant amount of business costs. That’s why in Q1 the rooftop solar demand is growing.
“The solar industry is grappling with how to move forward amid so much uncertainty. Bidding for auctions in the future will be extremely challenging, and developers must give themselves a lot of room to factor in the risks and price volatility. This is the first time we have seen module prices rise four quarters in a row in the last five to six years. Bidding low in anticipation that module prices will perpetually fall is an extremely risky strategy in today’s market,” Prabhu noted.
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