Solar Additions Down 64 Percent Q-o-Q in Q2 2020: Bridge to India

India added just 351 MW of solar power generation capacity in Q2 2020, down sharply at 64 percent QoQ due to COVID related constraints.

India added just 351 MW of solar power generation capacity in the second quarter of the fiscal i.e. Q2 2020, taking the total installed capacity to 38,377 MW by June 30, 2020. The quarterly analysis by Bridge To India detailed how the capacity addition were down sharply at 64 percent QoQ due to COVID related constraints.

The analysis also added that new capacity addition was split 60:40 between utility-scale solar – 211 MW and rooftop solar 140 MW. And that at the end of Q2, the total commissioned utility-scale, rooftop solar and off-grid solar capacity stood at 32,497 MW, 5,880 MW and 981 MW respectively.

Further adding that the total project pipeline – projects allocated to project developers and at various stages of development – stood at 42,229 MW as on June 30, 2020.

The analysis goes on to highlight that the capacity additions were significantly below its earlier estimate of 500 MW in the quarter due to extended lockdown and the consequent effect on the movement of people and goods. While construction activity picked up towards the end of the quarter, but labour shortage and restrictive work practices continued to affect progress.

The rooftop segment only added 140 MW capacity in the quarter. And as the report defines it, the sector is struggling with contraction in demand, higher working capital and payment delays. The report estimates that the rooftop solar capacity additions over Q3 and Q4 will be 600 MW (23 percent decrease YOY).

For tendering activity, the report adds that tender issuance dropped by 65 percent in comparison to Q1 2020. 14 utility-scale solar tenders (10 utility-scale solar, 3 floating solar and 1 solar-wind hybrid) aggregating 5,053 MW were issued in Q2 2020. SECI issued 3 new tenders accounting for nearly half of total tendered capacity. Tender issuance by the states also dropped by 87 percent over the previous quarter.

Further, module prices fell sharply during the quarter to US cents 16.5/ W for multi-crystalline modules and US cents 17.5/ W for mono-PERC modules. However, the research agency expects the prices to recover in the coming quarters. EPC cost for rooftop solar installations remained unchanged at Rs 32.5/ Wp because the reduction in module prices was offset by the rise in BoS prices.

The report concludes by stating that it expects project construction to pick up the pace over the coming quarters. It expects 4,720 MW to be commissioned in H2 2020, bringing total commissioned capacity for 2020 to 5,620 MW, which will be the lowest capacity addition over the last 3 years. However, lower equipment prices and lifting of lockdown related restrictions should help developers bounce back with higher capacity addition in 2021.