New Delhi: India added 10 gigawatts (GW) of solar capacity in the year 2021, a 210 percent increase year-over-year (YoY), compared to 3.2 GW installed in 2020, according to Mercom India in its newly released Q4 & Annual 2021 India Solar Market Update.
“Installations in 2021 were the highest ever recorded in India Cumulative solar installed capacity in India was approximately 49 GW at the end of Q4 2021” the report said.
During the year 2021, large-scale solar projects accounted for 83 percent of installations with 8.3 GW and saw a 230 percent increase YoY.
Rooftop installations made up the remaining 17 percent ,adding 1.7 GW, a 138 percent spike YoY.
A significant number of projects were moved from 2020 to 2021 due to COVID-19 extensions, which boosted the installation totals in 2021.
“Solar installations in India in 2021 were the highest ever with the country breaching 10 GW for the first time in a year. Demand outlook for 2022 is strong, but significant challenges await the industry, beginning with the basic customs duty, import restrictions, and the goods and services tax on top of global supply chain issues, and high component prices. Challenges aside, the Indian solar market has significant growth potential and is only just starting to take off,” said Raj Prabhu, CEO of Mercom Capital Group.
According to the report, India’s installed renewable energy capacity, including large hydro projects, stood at 150.9 GW, accounting for a share of 38.4 percent in the overall power mix at the end of December 2021.
Newly installed solar capacity in 2021 reached a new high, making up 62 percent of all power capacity installed in 2021. Solar now accounts for 12.4 percent of India’s total installed power capacity and 32 percent of the total installed renewable capacity as of 2021.
The year also saw delays in the signing of the power sale agreements (PSAs) and lack of clarity of the applicable duties, resulting in a dip in solar tenders by 4.3% YoY and auctions by 2.6% compared to 2020.
This, however, did not discourage the capital flow, with investments of nearly $10 billion (~ 748 billion) flowing into the Indian solar sector, a 254% increase compared to the $2.8 billion (~ 206 billion) in 2020.
The report also mentioned that Rajasthan, Karnataka, and Andhra Pradesh were the top three states for large-scale solar installations.
Average large-scale project costs in Q4 increased 21.6 percent YoY in 2021, the highest ever over the past ten years Solar accounted for 62 percent of new power capacity additions in 2021, the largest share of power capacity ever Renewable energy sources accounted for about 77 percent of the new power capacity added in 2021.
