India experienced a significant decline in solar capacity installations during the January to September period of 2023, with a reported fall of 47% to 5.6 gigawatts (GW). This reduction is a notable contrast to the 10.5 GW installed during the same period in 2022. Several factors contributed to this downturn, including delays in project execution and challenges in securing transmission connectivity. Specifically, the utility-scale installations dropped by over 54% year-over-year to 4.2 GW.
The July to September quarter of 2023 saw installations at 1.9 GW, a 34% decrease from the 2.8 GW installed in the same quarter of the previous year. However, there was a marginal quarter-on-quarter increase of almost 6% compared to the second quarter of 2023, which saw 1.8 GW installed.
Despite these challenges, there is optimism for growth in 2024, particularly due to declining prices of solar products, which could potentially lead to a rush of installations in the first quarter of 2024.
The issues that contributed to the decline in installations included delays in large-scale solar and hybrid power projects, primarily due to land and transmission issues. Additionally, an oversupply of modules in China led to a consecutive decrease in the average selling prices of solar modules over the last four quarters.
The Central Electricity Regulatory Commission (CERC) issued clarifications towards the end of the third quarter, which are expected to ease the process of securing transmission connectivity over the coming quarters. Nevertheless, several projects, especially those in the habitat of the Great Indian Bustard (GIB), are still awaiting a Supreme Court order to proceed.
India’s cumulative installed solar capacity, including rooftop installations, exceeded 69 GW as of September 2023. The country’s utility-scale solar development pipeline stood at nearly 77 GW, with over 68 GW of projects pending auction at the end of the third quarter of 2023. Rajasthan led in cumulative large-scale solar installations with nearly 17 GW, followed by Karnataka and Gujarat.
Further analysis revealed that approximately 8.5 GW of solar capacity was added in the first three quarters of 2023, indicating a 25% year-on-year decline. The breakdown of this capacity included 5.06 GW of utility-scale solar, 3 GW of rooftop solar, and 0.4 GW of off-grid solar. Notably, utility-scale solar installations plummeted by 45.6% compared to the same period in 2022, which totalled 9.3 GW.
Rooftop solar installations, on the other hand, showed a substantial increase of 126% year-on-year, attributed to the reduced cost of solar modules. This sector is expected to continue growing in the near to medium term. Leading states in rooftop solar installations during this period were Karnataka, Gujarat, and Maharashtra.
In contrast to solar, the wind energy segment saw a significant increase, with 2.28 GW of new capacity added from January to September 2023, a 123% rise from the 1.02 GW installed in the first nine months of 2022. Adani held the top spot in cumulative solar and wind installations as of September 30, 2023, with 8.3 GW of operational capacity and 20.4 GW in pipeline projects.
In summary, India’s solar capacity installations in 2023 experienced a notable decline due to a combination of project execution delays, transmission connectivity issues, and fluctuating module prices. However, the increased installations in rooftop solar and the positive outlook for 2024 suggest potential for recovery and growth in the solar energy sector in India.