India’s Stuttering Solar Progress Grinds To a Halt With COVID-19

Two latest reports by independent research agencies in the Indian renewable energy segment have revealed that the first half of the year (H1 2020) only saw a total of between 1 GW and 1.3 GW of new solar installations in India. While the full year installations expected to reach 3.5 GW (4.5 GW with rooftop) to 4 GW (utility-scale plus rooftop) with a slight jump in installations in the second half of the year.

Solar Installations:

The first report by JMK Research has reported that COVID-19 has ravaged installation numbers, with India is expected to commission only about 2.2 GW to 2.5 GW of new solar projects in the second half (H1) of the year. While also adding that the second half would almost double the installations reported in the first half, during which period India only managed to add about 1 GW of new utility-scale solar capacity, a 70 percent drop compared to the same period last year. Total utility-scale installations in the year are expected to reach 3.5 GW, according to the report. The numbers make sense, when one considers how leading developers like Azure Power have reported nil to minimal progress in April-June this year on their projects pipeline.

The second report by Mercom India Research, found that solar installations in the first half of 2020 totaled 1.016 GW (1.3 GW with rooftop installations), witnessing a 59 percent decrease compared to 3.2 GW (total) of capacity added in H1 of 2019. The report goes on to add that it expects approximately 4 GW of solar to be added in 2020, which was the worst-case scenario laid out in its previous report.

Rooftop Solar:

The JMK report also added that the rooftop solar industry is worst-hit by the COVID-19 pandemic. In 2020, and it has estimated that about 1 GW to 1.2 GW of total rooftop solar is likely to be added in the entire year, however, no numbers were provided for the installations so far in the half year analysis.

The Mercom report found that there were about 85 MW of rooftop solar installations, a decline of 56 percent compared to 194 MW installed in the last quarter, as rooftop installations declined by 71 percent compared to Q2 2019. However, the report has not presented with estimated installations in the segment for the entire year.

Pipeline:

The JMK report details all the tenders and auctions issued and completed in the period, with Q2 2020 seeing 27 new tenders aggregating to a total capacity of 5.23 GW of new solar capacity tendered across utility solar, rooftop solar and floating solar segments. It further added that of the 5.23 GW tendered in Q2, 4.49 GW of tenders’ auction was completed; out of which about 4.48 GW was allocated. The report also stated that the current pipeline of projects stands at 47 GW while another 24 GW of projects are under bidding phase where tenders have been issued but auctions are yet to complete. However, that’s for all solar, wind and hybrid projects.

The Mercom report also mentions that despite the decrease in solar installations, there are currently 41.7 GW of large-scale projects under development, “giving the industry a glimmer of hope for recovery.” And that there are also another 32.4 GW of projects tendered and awaiting auction.

2021:

The JMK report goes on to add that with the recovery in sight and industry picking up the lost pace, the solar installations in 2021 would bounce back from the slump caused by COVID, and expects 7.7 GW of new solar installations to be added to the grid in the next year.

Mercom report does not include the predicted installations for the next year in its half-yearly analysis.

To read the reports click here (1) or here (2)

While the numbers are expectedly poor, care needs to be taken not to blame everything on COVID-19. The fact of the matter is, capacity additions, notwithstanding a bulging pipeline of tendered projects, were already in the slow lane, well before COVID-19 stuck. Installations have been on a downward curve since the peak in 2017, and 2020 has simply made it a steeper drop. Nowhere is this more apparent than the appalling numbers in rooftop solar, where the target of 40 GW is a joke today. It will need strong policy interventions, as well as a major dent on the discom financial crisis to make things change there.

{Updated August 20, 2020}