PV installations in Q2 fall by half

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India installed just 1.6 GW of PV capacity from April to June, compared to 3.3 GW in the first quarter. Large-scale installations accounted for 74% – 1.2 GW – of the figure, and rooftop solar, the remaining 415 MW.

Cumulative installed solar capacity at the end of June was 24.6 GW, with large scale projects supplying 90 per cent and rooftop solar the rest, according to Mercom India Research’s Q2 2018 India Solar Market Update.

Overall, 4.9 GW of PV capacity was installed in the first half and if commissioning for the final quarter stays on schedule, the 2018 total will reach nearly 8.3 GW.

The fall in installations came mostly from large scale projects, due to the lack of a strong project pipeline. Tender activity fell after record low tariffs were reached in the Bhadla auction of May 2017, with government agencies then expecting other bids to fall to the Rs2.44 (US$0.03499)/kWh level seen there.

Costs still falling

Interestingly, PV project costs are falling. The average selling price (ASP) of Chinese modules fell around 5%, quarter-over-quarter, to $0.33 (Rs22.58)/W in Q2 2018, from $0.346 in Q1. Indian PV module prices, meanwhile, have declined by as much as 9% in the same period.

Project costs have declined by the same measure. Large-scale project costs have fallen below Rs40 million ($572,000)/MW for the first time, and projects cost approximately 10% less in solar parks. As higher-efficiency mono PERC modules gain traction, the land requirement has also reduced, adding to savings. Rooftop project costs also declined on a quarterly basis, due to cheaper modules and lower balance of system costs.

Suresh Prabhu, Union Minister of Commerce and Industry and Civil Aviation, recently stressed the need for joint efforts to reduce the cost of finance and technology for the mass production of solar in India. He said many firms in Australia and Japan are keen to invest in India’s solar sector.

But Mercom India Research predicts solar installations next year will be flat, largely due to a lack of auctions and to new guidelines from the Ministry of New and Renewable Energy, which allow 24 months to commission projects of 250 MW and above, and 21 months for smaller projects. More than 1 GW of large-scale PV projects will have their commissioning dates moved from 2019 to 2020, as a result.