India installed 7.4 GW of new solar capacity in the first nine months of 2021, putting this year on track to become one of the best 12-month periods on record for new PV installations.
December 10, 2021
From pv magazine India
India is recording robust growth in solar installations this year, even though developers face a range of market challenges, according to Mercom India Research’s newly released Q3 2021 India Solar Market Update.
Higher raw material costs, severe volatility in the availability and prices of modules, power curtailment in several states, and high freight charges have all added to the difficulties that developers now face. However, India’s solar additions surpassed 7.4 GW in the first nine months of 2021, up 328% year on year, said Mercom India Research.
India added 2,835 MW of solar in the third quarter of the calendar year, up 14% from the 2,488 MW installed in the second quarter. Third-quarter installations soared by 547% year on year.
“Despite supply challenges, the Indian solar market is headed towards one of best years on record, and a complete turnaround from 2021, which was one of the worst years for solar due to Covid-19,” said Raj Prabhu, CEO of Mercom Capital Group. “We expect a strong 2022 despite the high price of components and uncertainties surrounding the Great Indian Bustard (GIB) related transmission issue in Rajasthan. An increase in GST, curtailment, and payment issues are adding to the challenges facing developers and constraining growth.”
The average selling prices of solar modules rose steeply in the third quarter. Prices of mono PERC modules surged more than 15% quarter on quarter, with supply constraints emerging after major manufacturers started cutting output in China. Freight charges peaked at around $9,000 per container in the quarter.
“Manufacturing capacity ramp-up continues at a brisk pace as domestic producers look to take advantage of the 40% basic customs duty scheduled to be imposed from April 2022. In the second quarter of next year, we can expect to see procurement strategies starting to change drastically as imports become expensive,” said Prabhu.
According to the report, module prices have now been increasing for six consecutive quarters – a trend not seen in the past 10 years. The current three-month period has also seen the largest quarterly increase in large-scale system costs, due to higher raw material and component prices.
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