India E-Mobility Show

Solar capacity slows down; new solar addition came down by 15.5 percent in 2018

Solar capacity addition in India last year came down by 15.5 percent to 8,263 MW as compared to 2017 due to safeguard duty and issues related to GST and transmission, a report said. The year 2017 saw new solar installations of 9,782 MW.

According to the report by Mercom India Research, the safeguard duty and issues related to land, transmission and GST took a toll on large-scale installations in 2018. However, it said the rooftop solar had an impressive year, growing 66 per cent year-on-year.

Total power capacity additions in India stood at 16.3 GW in 2018 from all sources. Of this, renewable energy sources accounted for nearly 70 per cent, with solar representing 50.7 per cent and wind 14 per cent.  Coal-based capacity accounted for 27.5 per cent of capacity additions in 2018.

“To succeed in the Indian solar market, companies need to play the long game. For the first time in India’s history, solar made up over 50 per cent of new power capacity in 2018. We will continue to see a steady shift towards solar as prices continue to drop. This is going to be the new normal as coal plants continue to shutter,” Raj Prabhu, CEO and co-founder of Mercom Capital Group, said in the statement.

Following a 50 per cent rise in first quarter of 2018 as compared to fourth quarter of 2017, installation growth remained steady for rest of the year. Financing rooftop installations could be challenging in 2019 as Indian banks are facing a liquidity crunch with many banks hitting the exposure limits to the power sector, it added.

The report found that solar parks continue to face issues in providing clearly demarcated-ready land for project development, causing undue delays and putting additional pressure on large-scale projects. The market is adjusting to the safeguard duty regime, but much will depend on Chinese solar policy and installation goals going forward. Any increase in installation targets in China will tighten supplies and harden module prices while oversupply and module price decline could result if China decides to pull back on its solar installation targets, it said.

“Tariff caps and retroactive cancellation of solar auctions have been the biggest concerns in the investment community,” added Prabhu.

As the general election nears, the rules of the election commission could affect land acquisition and government approvals for solar projects. However, elections generally mean fewer power cuts and increased power demand, it added.

In October-December 2018, solar installations were at 1,638 MW, up three per cent quarter-on-quarter, but 52 per cent lower as compared to the fourth quarter of 2017.

According to the report, rooftop installations in 2018 totalled 1,655 MW, a 66 per cent growth from the previous year.  Cumulative rooftop solar installations have reached 3,260 MW. In terms of annual growth, rooftop solar continues to be a bright spot, as commercial and industrial entities see it as a viable way to combat higher power tariffs.

Source: PTI


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