NAVI£ºHOME > NEWS > Industry News
Industry News
India solar deployment forecasts revised downwards as COVID lockdowns, supply chain issues leave pro
TIME£º2021-05-31    VIEWNUM£º537    SOURCE£ºPV-TECH

By PV-TECH--May 28, 2021

Image: ReNew Power


India installed just over 2GW of solar in Q1 2021 as the country rebounded from COVID-19 related delays, however full-year installs could fall to well below previous estimates, one forecast suggests.

Research and consultancy firm Bridge to India, in an update to its Solar Compass report published today, says that 2,105MW of solar was installed in Q1 2021, taking the country¡¯s total cumulative capacity to 44.2GW.

Mercom India¡¯s solar market update has a broadly similar figure, stating that 2.05GW of solar was installed in the quarter, up on the 1.5GW installed in Q4 2020 and an 88% increase on the 1.1GW installed in Q1 2020.

Those figures make Q1 2021 the most prolific quarter for solar deployment in India since Q3 2019, driven by a rush of projects delayed from the previous year.

But the prospects for future quarters looks ¡°murky¡±, according to Bridge to India, as the situation for development grows complicated due to further pandemic-associated lockdown measures enforced in India and increasing project execution costs.

Solar module costs have increased in recent weeks on the back of soaring polysilicon prices, while other components have also experienced similar supply chain constraints and revised prices accordingly.


 Bridge to India has said that while module and other equipment prices have remained relatively stable to date, the risk of delays has increased and some suppliers are believed to be renegotiating contracts due to supply chain constraints.

Furthermore, India has recently passed a basic customs duty of 25% on cells and 40% on modules, increasing the price of imported solar components further.

While auction and tender activity has remained strong ¨C more than 19GW of solar was contracted for via tenders and auctions in India in Q1 ¨C Bridge to Inside said an ongoing reluctance from the country¡¯s distribution companies, or DISCOMs, to sign power purchase agreements remains a ¡°major concern¡±.


 Bridge to India managing director Vinay Rustagi spoke to sister publication PV Tech Power about the issues surrounding DISCOMs and other policy hurdles earlier this year.

Mercom India now forecasts that just 7GW of solar will be installed in India this year, a 3GW revision of the 10GW it forecasted earlier this year and considerably weaker than the 12GW and 13.5GW initially forecasted by BloombergNEF and Bridge to India respectively.

¡°With the second wave of the pandemic hitting the country, the industry is battling solar component price increases and volatility. Even more concerning is the uncertainty in procurement as shortages are widespread. Policy restrictions and duties have added to the rising costs and unpredictability,¡± Raj Prabhu, CEO of Mercom Capital Group, said.