India recorded its highest-ever annual solar capacity additions in 2021, despite the ongoing rise of component costs.
From pv magazine India
India added 10GW of new solar capacity in 2021, up 210% from the 3.2GW installed in 2020, according to a newly released report by Mercom India Research.
Large-scale solar projects accounted for 83% of all PV installations, up 230% year on year. Rooftop solar installations accounted for the remaining 17%, said Mercom India Research.
A significant number of 2020 projects were delayed until 2021 due to the Ministry of New and Renewable Energy’s pandemic-related project timeline extensions. This boosted overall capacity additions in 2021. India’s cumulative installed PV capacity reached approximately 49 GW at the end of December.
The Mercom India Research report predicts strong PV growth for this year, despite module supply constraints due to the Approved List of Models and Manufacturers (ALMM) mandate. It identifies basic customs duties and rising component prices as the key challenges for the industry on the supply side.
“Demand outlook for 2022 is strong, but significant challenges await the industry, beginning with the basic customs duty, import restrictions, and the goods and services tax on top of global supply chain issues, and high component prices. Challenges aside, the Indian solar market has significant growth potential and is only just starting to take off,” said Raj Prabhu, chief executive officer of Mercom Capital Group.
The report noted that average project costs rose in 2021 due to higher module costs, raw material prices, and freight charges. Average large-scale project costs increased 21.6% year on year in the fourth quarter – the highest increase recorded in the past 10 years. Average rooftop solar costs in the fourth quarter rose 14.8% year on year.