Source: navhindtimes.in
India achieved a milestone by adding over 10 GW of solar capacity in the first quarter (Q1) of 2024, marking the highest quarterly installation to date.
This figure represents an almost 400 per cent year-over-year (YoY) increase compared to the over 2 GW installed in Q1 2023, as per the recent Q1 2024 India Solar Market Update from Mercom India Research.
Quarter-over-quarter (QoQ) capacity additions also saw a dramatic surge of 414 per cent. In Q1 2024, the total installed capacity of large- scale solar stood at 9.7 GW, which included 1.8 GW from open access solar projects. This represents a 524 per cent QoQ increase and a nearly 534 per cent YoY rise.
Priya Sanjay managing director, Mercom India, said, "The surge in installations during the first quarter of this year is was driven by the commissioning of several delayed projects that had received extensions in previous quarters due to high module prices. Falling module prices and suspending the Approved List of Models and Manufacturers (ALMM) order enabled developers to import modules at lower costs, facilitating project completions."
Several projects were commissioned early to take advantage of the ALMM order suspension. Additionally, granting grid connectivity to projects previously stalled in the Great Indian Bustard habitat significantly contributed to the record-breaking installations.
"There is a substantial pipeline of large-scale projects scheduled for this year signifying a record-breaking year for solar power. Assuming stability in policy and supply chains, and if government agencies continue to auction projects and meet the set targets, India is poised to be among the top three solar markets globally", commented Raj Prabhu CEO, Mercom Capital Group.
In Q1 2024, the power capacity added was 15.2 GW, of which solar power accounted for 66 per cent of the additions. Rajasthan and Gujarat led the large-scale solar installations followed by Madhya Pradesh.
As of March 2024, the cumulative installed solar capacity is 82 GW. Solar energy represented 18.5 per cent of India's total installed power capacity and 43 per cent of the total installed renewable energy capacity.
Rajasthan boasted the highest cumulative installed large-scale solar capacity, accounting for 29 per cent of the national total, followed by Gujarat and Karnataka at 14 per cent each.
According to Sanjay, Gujarat's proactive approach to renewable energy, especially with residential solar and wind-solar hybrid power projects, enabled it to overtake Karnataka. "Gujarat's foresight and supportive infrastructure and policies have attracted numerous large-scale projects." she said.
There are 143.3 solar projects in the pipeline with an additional 93.1 GW projects tendered and pending auction. The average cost of large-scale solar projects fell by 7 per cent QoQ and 28 per cent YoY, significantly improving the projects' internal rate of return. "The reduction in the average cost of large-scale solar projects is largely attributed to the falling prices of solar modules," added Sanjay.
During the quarter, tenders totaling 30.7 GW were announced. Additionally, 25 GW of solar projects were auctioned. "The surge in tendering activity was driven by agencies adhering to defined targets and timelines. Previously, delays in auctions and Power Purchase Agreement (PPA) signings deterred bidders as they led to funds getting locked up," pointed out Sanjay.
Streamlined auctions and attractive tariffs have revitalized the process, leading to quicker PPA signings and increased developer interest. Nonetheless, inadequate transmission infrastructure and land acquisition delays could hinder timely project commissioning.
Developers are racing to complete projects before the June 2025 ISTS charges waiver deadline. Rising land costs and the scarcity of prime sites for solar could further complicate the landscape.
