Drop in capacity additions was a result of increased project extensions
May 28, 2023 – India added 1.9 GW of solar capacity in the first quarter (Q1) of calendar year (CY) 2023, a 30% decrease compared to the 2.7 GW installed in Q4 2022. The number represents a 48% decrease year-over-year (YoY) when compared to the 3.6 GW added in Q1 2022, according to the newly released Q1 2023 India Solar Market Update by Mercom India Research.
India installed 1.4 GW of large-scale solar in Q1 2023, a 37% quarterly decrease and a 56% YoY decline.
Large-scale solar accounted for 74% of installations, with rooftop solar making up an additional 26%.
India’s cumulative installed solar capacity now stands at 64.5 GW.
As of March 2023, the country’s utility-scale project development pipeline stood at 58 GW, with an additional 58 GW of projects tendered awaiting auction.
India’s solar industry passed an important milestone in 2022, setting a new record with 13 GW of capacity added. But additions are expected to be lower in 2023 as commissioning deadlines for several projects have been moved to next year. Besides projects stuck in the habitat of the Great Indian Bustard, an increasing number of projects are facing delays due to land and transmission issues.
“The market is re-calibrating following the ALMM decision by the government. Project extensions, GIB, and infrastructure issues point to a softer year than predicted. On a positive note, module prices are trending in the right direction, and project costs declined for the first time after rising for ten consecutive quarters, bringing much needed relief to the solar industry,” said Raj Prabhu, CEO of Mercom Capital Group.
In Q1 2023, Rajasthan and Karnataka were the top states for solar, accounting for 42% and 21% of installations, respectively. Gujarat came in third with 19%.
Rajasthan led all states with 16 GW of cumulative large-scale solar installations at the end of Q1 2023, accounting for over 29%.
Multiple implementing agencies announced 13.8 GW of tenders in Q1 2023, an increase of 172% YoY compared to 5.1 GW announced in Q1 2022. The tender activity was up 43% quarter-on-quarter.
In Q1 2023, India added 4.1 GW of new power capacity, with solar accounting for over 45% of the total.
Key Highlights from Mercom India Research’s Q1 2023 India Solar Market Update:
- In Q1 2023, India added 1.9 GW of solar capacity, a 30% decline compared to the 2.7 GW installed in Q4 2022.
- Large-scale solar accounted for 74% of the installations, and rooftop solar for the remaining 26%.
- India’s cumulative installed solar capacity now stands at 64.5 GW.
- In Q1 2023, renewable energy sources accounted for around 41% of the country’s power mix.
- Solar accounted for over 45% of new power capacity added during the quarter.
- In Q1 2023, Rajasthan and Karnataka were the top states for solar installations. Mercom’s India Solar Q1 2023 report is 78 pages and covers all facets of India’s solar market. For the complete report, visit: https://mercomindia.com/product/q1-2023-india-solar-market-update About Mercom IndiaMercom India (formerly 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. For more information, visit: https://www.mercomindia.com