NEW DELHI: The pace of solar power capacity addition in the April-June period has dropped sharply after notching rapid growth in four consecutive quarters as recent policy chaos around safeguard duty on imports and reopening of power purchase agreements begin to tell on promoters.
According to an update from green energy market tracker Mercom India, the rate of adding solar installations declined 52% to 1,599 MW in the April-June period from 3,344 MW installed in the first three months of the calendar year. This is the lowest since the January-March period of 2017.
Total installations in the April-June period were down about 21% from 2,025 MW installed in the corresponding period of 2017. Large-scale installations totalled 1,184 MW in the period under review against 2,954 MW in the first three months of the current year and 1,800 MW in the April-June period of 2017.
The Mercom group tracks markets in accordance with the Western practice of tuning financial year to the calendar year, under which January marks the opening month of the first quarter.
“The drop in solar installations in Q2 (calendar year) of 2018 after four consecutive quarters of growth was expected and can be attributed to uncertainties around trade cases, module price fluctuations, and PPA renegotiations after record low bids, which contributed to a slowdown in tenders and auctions in 2017. All of this resulted in a weaker project pipeline for 2018,” Mercom Capital group CEO Raj Prabhu said.
The drop in installations was seen mostly in large-scale projects due to tapering project pipeline. Tendering activity declined after tariff bids hit their lowest at Rs 2.44 per unit in the May 2017 auction for the Badhla solar project in Rajasthan and government agencies started expecting similar offers in other auctions.
“Due to uncertainty around the safeguard duty, auction activity in the first half of 2018 was weak, which will result in a smaller project pipeline for large-scale units for 2019. We expect the market to freeze for 3-6 months following the safeguard duty announcement,” said Prabhu.
Mercom sees installations to remain flat in 2019 also because of shrinking auctions and the renewable energy ministry’s guidelines allowing 24 months for commissioning projects of 250 MW or more and 21 months for up to 250 MW. Over 1 GW of large-scale projects will have their commissioning dates moved from 2019 to 2020.
Rooftop installations accounted for 415 MW in the April-June period, up 6% from 390 MW installed in the first three months and up 84% from 225 MW installed in the January-March period of 2017. Large-scale solar projects accounted for 74% of the total installations in the April-June period, while rooftop solar accounted for 26%.
Cumulative solar installed capacity totalled in excess of 24 GW (giga watt) at the end of June, with large-scale solar projects accounting for 90% and rooftop solar making up the remaining 10%. The large-scale solar project pipeline for India stands at 11GW. Projects totalling 18.6 GW have been tendered and were pending auction at the end of June, the report said.
Mercom has forecast solar installations of more than 8 GW in the current calendar year, with some upside in the OctoberDecember period if commissioning of projects stay on course.
Source: timesofindia.indiatimes
