India recorded its highest-ever annual rooftop solar addition of 1.7GW in 2021. Installations were up 210% year-on-year, according to Mercom India Research’s newly released Mercom India Rooftop Solar Market Report Q4 and Annual 2021.

Residential and commercial segments accounted for 35% and 33% of the installed rooftop solar capacity, respectively. Industrial rooftop solar installations constituted 26%, and the remaining 6% was from the government segment.

“The rooftop solar market in India had its best year, largely due to the pent-up demand from 2020, which experienced a severe decline due to Covid-19. Certainty around net metering regulation helped along with demand from consumers across all segments – residential, commercial, and Industrial. An increase in component costs will dent demand in 2022, but we still expect positive growth this year,” said Raj Prabhu, chief executive officer of Mercom Capital Group.

According to the report, India’s cumulative rooftop solar installations surpassed 7GW as of December 31, 2021. Gujarat has the most installed rooftop solar capacity, followed by Maharashtra and Rajasthan.

Rooftop solar installations in the fourth quarter (October-December period) stood at 402MW, a 10% drop compared to 448MW added in Q3 2021. However, Q4 2021 installations were up 41% year-on-year.

Rising prices

Mercom analysts said installations in 2021 could have been higher if not for price increases in components, commodities, and raw materials. The hike in the goods and services tax (GST) rate also dealt a big blow to installers.

On an average, installing a rooftop solar system in 2021 cost 14.75% more than in Q4 2020 as installers increased prices to match the 12% GST hike and combat high material costs.